LONDON, Oct 4 Russian Urals crude held steady on
Friday despite weakening margins while traders scrambled to get
details of a fresh supply deal between Russian state major
Rosneft and BP.
BP has agreed to buy $5.3 billion of oil and refined
products from Rosneft, becoming the first oil major to secure
such a long-term pact with the Kremlin energy champion.
Rosneft will supply BP with up to 3 million tonnes of Urals
oil from the Baltic Sea port of Primorsk and 1.68 million tonnes
from the Black Sea port of Novorossiisk, worth $2.4 billion and
$1.3 billion respectively.
BP will also receive up to 840,000 tonnes of fuel oil, worth
$620 million, from Tuapse at the Black Sea, while BP Singapore
will handle up to 1.1 million tonnes of fuel oil, worth up to
$920 million, from the Pacific port of Nakhodka.
"The market is certainly lacking details," a trader with a
rival said. "Is it a Glencore/Vitol type of deal when the
traders brought money in exchange for supplies? Or is it a
separate tender that Rosneft held? It is all a bit confusing."
Rosneft did not disclose other details of the deal.
There were no bids or offers in Urals or any other Baltic or
Mediterranean grade in the Platts window, traders said.
"I suppose it will all remain a bit quiet until first
loading dates for November are released," a Urals trader with
another major said.
Azeri Light and CPC loading dates are due next week.
Earlier in the week, Saudi Aramco cut its November price for
Arab Light for Asian and European customers.
"The biggest cuts were seen in Asia and Europe, where price
levels for October barrels had reached relatively high levels on
the back of the Libyan outage, as well as maintenance in key
condensate producers in Qatar and Australia," JBC Energy
consultancy said in a note.
"With Libyan crude now reported to be back up to around
700,000 bpd, the outlook for November looks less tight, while
slumping naphtha and gasoline cracks are further putting light
distillates under pressure," it added.
"One could also argue that the relatively higher prices for
Arab Heavy may indicate a desire by Saudi Arabia to begin
reining in its currently high production rates, last estimated
at around 10.2 million bpd for September," JBC said.
Two years of turmoil since the Arab Spring and some of the
toughest terms in the business have led international oil
companies to reassess their role in North Africa, with U.S.
firms looking keenest to leave.
(Reporting by Dmitry Zhdannikov and Gleb Gorodyankin; Editing
by Dale Hudson)