ANALYSIS – Russia oil refiners turn to home for higher prices

MOSCOW, Jan 23 (Reuters) – Some of Russia’s largest fuel exporters are redirecting export volumes to the domestic market in a rush to cash in on high prices at home while recession fears drive a downturn on international oil markets.

Prices for light products as well as heavy fuel oil remain relatively high in Russia, while gas oil futures, the benchmark for cash trade in Europe, hit a three month low this week, and Europe’s fuel oil benchmark in recent weeks has traded near its deepest discount to crude oil in about a year.


On an outright basis, the seven day moving average for heating oil with 0.2 percent sulphur, the main benchmark for Russian gas oil in northern Europe, is running near $740, while the fuel oil average stands at $409.14.

According to Reuters data, diesel prices averaged 17,750 roubles ($713.1) per tonne last Friday, down 1 percent from the previous week, while fuel oil was high for the season, at 6,475 roubles ($260.1) per tonne, down from 6,955.

Traders say Russian prices will eventually succumb to international pressure soon as export volumes stay in the country and the peak winter heating period passes. Export duty will also rise in February.

Reuters