West African grades appeared balanced to slightly weaker and Mediterranean crude looked steady, although business in Med sours was too quiet last week to provide much transparency, traders said.

A key factor will be whether Asian buying revives to mop up West African and storage Brent cargoes as it has done for periods in mid-January.

"We see grades coming off a bit, mostly on margins which continue to move south, " said a trader for a US major.

He said a questionable arbitrage to the United States for physical Brent could crimp US buying of the benchmark grade.

But last week the smaller February programme was enough to persuade refiners buying baseload quantities to pay robust deltas of as much as 25 cents above forward March paper.

Non-Brent grades looked set to crumble to the mid to low 20s above Dated from the giddy heights of30 and sometimes 40 cents above Dated.

Forties loading at the end of February tumbled on Friday to a measly seven to eight cents above Dated - a precipitous 20 cent slide from mid-week.

Ekofisk was done at 25 cents above the benchmark, markedly lower than discussion in the 30s, while Statfjord was firmly expected to take some punishment at levels well under an offered price of around Dated +40 cents.

Brent provided negative returns of 70 cents a barrel for a fully upgraded refinery on the US Gulf Coast late last week, double the losses of the previous week's average, according to Reuter caculations using standard product yields.

Brent in Rottterdam provided a profit of 30 cents, half of the average for the previous week.

Strong Brent boosted by a squeeze on near term values was unlikely to be of any help to West African prompt cargoes.

But at least Qua Iboe can draw some comfort from Indian Oil Corp (IOC), which awarded at least four very large crude carriers (VLCC) of Qua Iboe and five Dubaicargoes in its March crude tender last week.

Dealers said Vitol was awarded five VLCC of Dubai and two Qua Iboe. Mobil was also awarded two VLCC of Qua Iboe.

A Bonny Light loading February 12-13 fetched Dated Brent +25cents in a tender by Chilean state-owned ENAP.

But around 12 other Nigerian cargoes loading in February remained unsold and traders have shown no consensus about what sort of price these will fetch.

The March programmes are expected to emerge around February 1.

Attention will also be riveted on Asia, where Brent's flip into backwardation from a long held contango triggered a surge of physical Brent sales into the region this month.

Traders estimate that Arcadia had sold five million barrels of the North Sea crude into China and Singapore from South African storage tanks.

Most of the crude was expected to arrive in Asia in March and traders estimated that Arcadia's storage in South Africa was now cleared out of Brent.

Mediterranean crude markets still assessed unexpectedly highIraqi official selling prices and an aggressive start to Algerian price negotiations.

Dealers were surprised on Tuesday when Iraq raised prices for its February loadings by 35 cents for European-bound shipments. Unusually, Iraq's price change did not closely mirror that set previously by Saudi Arabia.

Some traders wondered if the higher price for Kirkuk, combined with further falls in its quality, might mean that some lifters would choose not to take cargoes.

West African sellers identified weakening sentiment as a recent European buying spree eased, and Asian buying tailed off.