Persistently bad refinery margins, around $1.00 per incremental barrel for topping units in north west Europe, will cap demand and work against any upside move in differentials, traders say.

BP Amoco joined Royal Dutch/Shell late last week in reducing throughputs at the majority of its plants across Europe, implementing an 18 per cent cut at nine facilities.

Traders say that a similar move by Shell, now in effect for around a month, has given buyers the ability to wait comfortably for descending values.

"As long as the buyers see enough crude out there they have a tendency under these conditions to buy later rather than early and wait until things get prompt," said a North Sea trader.

Refinery cuts also surfaced in Asia on Tuesday when Shell Singapore said it planned to cut crude runs at its 59,000tonnes per day (TPD) refinery to 36,000-38,000 TPD for June.

Singapore Refining Co also said it planned to cut runs at its 2,85,000 barrels per day (BPD) Merlimau to an average of 2,50,000 BPD in June.

Traders said that while volumes of Oseberg still remained unsold, the grade would likely hold up the best of all the non-Brents due to the field's reduced loading programme in June.

Norway's Oseberg system is scheduled to load 8.5 million barrels in June in 14 cargoes, 40 per cent lower than the 15.3 million barrel May schedule, trading sources said.

Statfjord should benefit from support as well from the announcement of a two to three day delay in the field's June loading programme due to technical problems.

A standoff appeared to have taken shape on much of the West African market. Values were opaque following a quiet trading week and there was major uncertainty over the volume of crude destined for Asia in July.

Buyers were reluctant to enter the market for Nigerian grades while those sellerswilling to entertain discussion showed no sign of readiness to contemplate lower offer numbers.

Bonny Light was estimated at between 10 and 12 cents premium to Dated Brent, with Qua Iboe at around plus five and plus 10 cents.

Forcados was pegged around flat, with Cabinda assessed at 60 to 65 cents under Dated.

There was little availability of non-Nigerian grades for the first two decades of June. Traders said that while third decade availabilities existed buyers were sitting on the fence and proved reluctant to reply to sellers' ideas.

Early indications show Asian demand for West African volumes in July would not match record numbers in June, traders say.

But Chinese and Korean demand for West African volumes was not at all clear so far and these countries' requirements could yet transform the Far Eastern outlook.

Asian imports of West African crude in June were estimated to be more than a million BPD, matching record volumes seen in May, traders and shipping operators say.

"The whole market hasgone quiet, leaving prices very questionable," said one trader. "Crudes are still offered at firmish numbers but the buyers aren't there."

They said Nigerian crudes had benefited from cuts in middle east output in line with an OPEC pact to support oil prices.

Dealers said high Asian imports in June would continue to reflect the shift of demand away from Middle Eastern oil to cheaper Nigerian grades amid healthy Dubai prices, the marker price for Gulf exports east.

In the Mediterranean, sour crudes were weakening with Russian Urals sour rumoured done around Dated Brent minus $1.10 on Friday, some 10 cents softer than last done.

Iraqi Kirkuk was hard to pin down but was pegged notionally at a five cent premium to the offiical selling prices.

Dealers said India planned to import four VLCCs, down from five in May.

Taiwan's Chinese Petroleum Corporation is expected to buy three VLCCS in July against six in June and four in May.

The main variable looked like Chinese and Korean imports of West Africa.