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* NW Europe refining down to 75-80 pct of capacity
* Med refiners running at around 70 pct of capacity
* N. Sea maintenance, low Urals, Libya troubles support oil
By Ron Bousso and Claire Milhench
LONDON, Aug 12 (Reuters) - European refiners are set to cutcrude oil processing rates this week by around 500,000 barrelsper day (bpd) as soaring oil prices bite deeper into theiralready weak profit margins, traders and industry sources said.
The sources said on Monday that refiners, including BP, Royal Dutch Shell and Total, wouldreduce total output to around 11.5 million bpd.
Seasonal maintenance in the North Sea, lower than usualexports of Russian Urals and disruptions to exports from Iraqand Libya have pushed benchmark Brent futures prices this monthto their highest levels since April.
Higher crude oil prices mean refiners make less profit perbarrel from selling refined products, as the margin or crackshrinks.
"The cracks are awful; there is no question there.Refineries are losing money," a source at a Mediterraneanrefinery said. "This is a critical week for refiners as theydecide how to operate in the face of these margins."
European refiners are also having to pay up for the sourgrades that many of them prefer, with Russian Urals hittingrecord premiums to dated Brent.
"Mediterranean margins are completely dead on sour gradesmostly, and refiners have exhausted most grade switching as ameans of preserving profitability," a trader said.
Forties, a North Sea intermediate grade, has been trading atseven-month highs due to a tight August loading programme,whilst light, sweet Norwegian crudes have risen due to lowersupplies of West African crudes and Azeri Light.
"There is too little margin left on light, sweet grades aswell," the trader added. "Accordingly, run cuts are the onlymeans left to preserve profitability. The Libyan disruptionsspeeded this up as it deprived the refiners of their light,sweet alternatives."
A string of strikes over the past two weeks at Libya's majoroil fields and crude export terminals have cut production 50percent to levels not seen since the 2011 civil war, limitingcrude supplies in the region.
CRACKS PLUMMET
Refiners in northwest Europe are expected to cut crudethroughput to around 75-80 percent of full capacity this weekfrom about 85 percent in July, according to several sources.
Average refining margins for a Rotterdam refinery cracking Brent in northwest Europe were at $2.11 a barrel on Monday, downby more than 60 percent from 2013 highs seen in June.
The refineries expected to cut runs include BP's 400,000 bpdRotterdam plant, Statoil's 110,000 bpd Kalundborg,Total's 153,000 bpd Vlissingen, Shell's 412,000 bpd Pernis andPreem's 113,000 bpd Gothenburg and 210,000 bpd Lysekil plants.
BP, Shell and Preem refused to comment. Total and Statoildid not reply to requests for comment.
In the Mediterranean, crude processing levels are expectedto be slashed even further as they are overwhelmingly dependenton Urals crude.
Refining throughput will be reduced this week to around 70percent from 75 to 80 percent previously.
In the Mediterranean, average Urals cracks were at minus 37cents a barrel on Monday, down from $1.92 a barrel in July and$3.59 a barrel in June.
Spain's Cepsa said late in July that it had moved upmaintenance originally planned for October at its 88,000 bpdTenerife refinery as a result of weak margins.
