The Urals crude market strengthened sharply Wednesday in both Northwest Europe and the Mediterranean as buying interest increased sharply to clear some remaining prompt June cargoes.
Differentials for CIF Augusta Urals Aframax cargoes climbed $0.445/barrel Wednesday to be assessed at a $2.335/b discount to the Mediterranean Dated Strip. The climb marked a sharp reversal in the market, where differentials have been falling steadily since early April.
In the Platts Market on Close assessment process, Vitol lifted an ENI offer for an 80,000 mt Urals cargo, ex-Novorossiisk, loading June 21-25 CIF basis Augusta at Dated Brent minus $2.50/b, subject vessel acceptance of Super Lady.
On Tuesday, an ENI offer of a similar cargo with a June 20-24 laycan was offered down to Dated Brent minus $2.90/b before being withdrawn ahead of the 16:30 London close.
Market sources said that while there is still June Urals volume available in the Mediterranean, most of the remaining cargoes are available on larger, Suezmax vessels, while the Aframax market has largely been sold.
A Litasco bid for an Aframax Urals cargo loading June 24-28 CIF basis Augusta was left outstanding at Dated Brent minus $2.40/b at the London close.
"It's bizarre, really," a crude trader said. "I think people were scared to buy because the market kept falling, and it bottled up the demand, and when people sensed that it had bottomed out they started buying."
Differentials for CIF Rotterdam Urals cargoes also climbed Wednesday, up $0.265/b from the 26-month low seen Tuesday to a discount of minus $3.225/b relative to the Mediterranean Dated Strip Wednesday.
In the Platts MOC, a Totsa bid for a 100,000 mt Urals cargo, ex-Primorsk/Ust-Luga, loading June 28 to July 2 CIF basis Rotterdam was left outstanding at Dated Brent minus $3.25/b at the close.
"Overall in terms of sentiment, [the market] is on the upside," a crude trader said, but added that nothing had so far traded at higher levels.
