Prices of Russian domestic crude for July loading and delivery firmed compared with June due to higher Brent futures, trading sources said Wednesday.
Western Siberian barrels traded between Rb14,800-14,900/mt on average ($432.7-435.6/mt), compared to Rb14,000-14,300/mt for the previous month.
Surging international crude futures, especially at the start of trading for July barrels, was deemed by some as the main factor underpinning the higher prices.
Brent futures were trading at around $114/b at the start of the July Russian domestic trading window, compared to $111/barrel last month.
Rosneft, whose monthly tender sets the tone for the subsequent spot trading of domestic barrels, awarded its tender for Udmurtia crude at Rb15,195-15,270/mt, or around Rb700/mt up from the Rb14,530-14,600/mt prices it achieved for June loading and delivery crude.
Subsequently spot barrels of Western Siberian crude traded around Rb14,900-15,000/mt. But as trading progressed, Brent futures retreated to levels in the $112's/b and towards the end of the trading window some Western Siberian crude was heard changing hands around Rb14,600/mt.
But the bulk of traded barrels had already changed hands at higher numbers and some traders dismissed the impact of Brent, as its values dropped after trading had actually started. "It is an additional factor, which people consider before trading starts," said a trader.
In July, Russia's crude export duty was only marginally increased from $385/mt to $385.20/mt and had no impact on spot prices, sources said.
The higher export duty pushes down the export netback, which is used as a gauge by domestic traders for the price of domestic crude.
Healthy volumes of Usa crude from the Timan-Pechora region traded on the floor of the St. Petersburg Exchange around Rb14,700-14,800/mt, up from Rb14,150-14,160/mt last month.
Domestic demand has not been affected much by the recent fire at Rosneft's Achinsk refinery, which took it offline, and the expected surplus of crude had not materialized as exports ramped up instead, traders said.
