HOUSTON/MEXICO CITY, April 26 (Reuters) - Mexican state

oil company Pemex is reversing crude exports cuts of at least

330,000 barrels per day (bpd) planned for May amid a

smaller-than-expected oil demand by the company's domestic

refineries, two sources close to the decision said on Friday.

Pemex's international trading unit in April began enforcing

exports cuts over supply crude contracts to customers in the

United States, Asia and Europe to increase its availability of

crude for domestic refining.

Its new Olmeca Refinery in the port of Dos Bocas in

southeastern Tabasco, which has been running behind schedule and

over budget, is also expected to start up.

Earlier on Friday, Pemex executives said that the

refinery would start producing diesel next month.

But planned maintenance at some refineries and a

slower-than-expected startup at Dos Bocas will reduce the need

for domestic crude in May, the two sources and an additional

person with knowledge of the company's operations said.

Pemex did not immediately respond to a request for comment.

Recent fires at two Pemex refineries did not impact crude

processing at those plants because they happened at unrelated

infrastructure, the sources said, adding that the company's

overall demand for domestic oil is expected to fall next month.

Traders expect Pemex and its trading unit to use

contract provisions in supply contracts this year, allowing them

to allocate the exports volumes on a monthly basis.

This will give them room to adjust volumes available for

exports according to domestic refining needs.