Dated Brent is expected to strengthen largely on the back of forward hedging which places the benchmark at higher levels to those traded last week. The North Sea marker was valued at January paper minus $1.10 a barrel last week and swaps quotes for this week indicate levels at January minus 75 cents.

As a result, sellers were holding back despite good demand for Brent and other North Sea grades, whose narrowing differentials against a falling outright price in the contango market make it a buyer's market.

"There seems to be a bit of buying and if you can get Brent at these prices then fine but nobody is showing," a trader said.

Opec ministers are meeting in Vienna on Wednesday for a regular meeting to review oil policy but none of the oil group's leading producers has given out much hope of a new output cutto rescue prices, which last week fell to a 12-year low.

"It's all a bit in the air at the moment. We don't know what Opec is going to do," a trader for a European firm said.

In the Mediterranean, sour differentials were seen holding firm though the possible lull in Iraqi crude oil exports once the current oil-for-food plan ends was already factored into prices, traders said.

The last cargo of Iraqi Kirkuk under the fourth phase of the oil-for-food programme will load on Monday and the United Nations is not expected to announce a decision on the next phase until Wednesday.

Traders expect a delay of two weeks to a month before exports resume but are including Iraqi crude into their lifting programmes for December.

Kirkuk has fetched some 20-25 cents above the official selling price of Dated Brent -$1.55 in November as refiners anticipating the loss of some 1.9-2.1 million barrels per day (bpd) of Iraqi crude oil have been paying up to secure barrels.

Syria too is holding out for higher prices forits Syrian Light grade and is negotiating a 40 cent increase over the November OSP in December though no buyers have yet agreed the price.

Mediterranean refiners say they are enjoying a "golden period" with oil prices low and products prices firm. Refinery profits for refineries running Russian Urals crude in the last five days have averaged $2.40, their highest level since June.

A trader said refiners would be looking to replace Kirkuk with Russian Urals and Algerian Saharan Blend, a higher quality sweet crude. Differentials for the Russian sour crude against Dated Brent have been rising steadily on fears of a shortage of sour crude if Iraqi exports are interrupted.

"Urals at under $10 at the moment is probably a better buy but Kirkuk is a better crude and gives better netback values," the European trader said.

"With Dated Brent so low, the sours are going to struggle anyway because the sweet differentials over Dated are minuscule...Urals comes into its own when it goes below one dollar under Datedso with good quality basically flat to dated, sweet will take precedence as it's a better netback in the refinery," he added.

West African grades saw more December volume cleared at the end of last week and traders saw numbers firming this week.

"I think the market will be better next week, we have reached a bottom and from then on I think we'll see rises in outright values and in differentials," one trader said last week. "Also winter is coming and that should increase demand."

Length continues in some Nigerian light grades and Forcados but other grades are clearing up while Angolan barrels have recently been snapped up by Asian buyers.

Traders said the recent battering that crude futures saw has kept the arbitrage window to the Far East wide open, and this could also help to absorb more December barrels.

"The arb is open and we'll see incremental volumes moving there," a trader with a US refiner said.

"Brent and Dubai are almost even and people like to buy Brent-related," a second tradernoted.

Shipping sources said they saw at least three big vessels moving to the Far East in early and mid-December, taking out a total of 615,000 tonnes of West African crude.