Mars sour crude grade weakened on Friday, dealers said, as the spread between U.S. West Texas Intermediate crude and Brent narrowed to its weakest in nearly two months.
Mars Sour WTC-MRS eased 80 cents to a midpoint of a $1 premium, its lowest in nearly a month.
The grade, which typically trades at a discount to U.S. crude futures, traded at a $2 premium earlier this month, its highest in 3 years, as demand for sour grades has risen globally following Saudi Arabia’s plans to cut output.
Asian refiners have booked near-record volumes of U.S. crude to be shipped in August, replacing Middle Eastern oil, as competitive prices and ample supplies attracted heavy buying, trade sources said.
U.S. crude future’s discount to international benchmark Brent narrowed significantly this week to as low as a $3.85 a barrel discount, the narrowest since May. A narrower discount makes U.S.-linked grades less attractive to foreign buyers.
Meanwhile, WTI Midland WTC-WTM gained 10 cents, while WTI at East Houston WTC-MEH, also known as MEH, traded flat on the first day of the roll trade period.
The “roll” period lasts for three days after the expiry of the front-month U.S. light crude contract. Traders and refiners adjust their crude slate during this period and net out exposures following expiration of the U.S. West Texas Intermediate (WTI) CLc1 contract.
Trading typically tends to be more volatile during the period.
On the supply side, oil rig counts, an indicator of future production, fell by seven to 530 this week, their lowest since March 2022, according to Baker Hughes data.
In refining news, Marathon Petroleum Corp said a line from the fluid catalytic cracking unit (FCCU) needs to be blocked in order for repairs to take place at its 593,000 barrel-per-day (bpd) Galveston Bay Refinery in Texas.
* Light Louisiana Sweet WTC-LLS for August delivery fell 10 cents at a midpoint of a $2.50 premium and was seen bid and offered between a $2.25 and $2.75 a barrel premium to U.S. crude futures CLc1
* Mars Sour WTC-MRS fell 80 cents to a midpoint of a $1 premium and was seen bid and offered between a 75-cent and $1.25 a barrel premium to U.S. crude futures CLc1
* WTI Midland WTC-WTM gained 10 cents at a midpoint of a $1.1 premium and was seen bid and offered between a 90-cent and $1.30 a barrel premium to U.S. crude futures CLc1
* West Texas Sour WTC-WTS gained 10 cents at a midpoint of a 60-cent premium and was seen bid and offered between a 40-cent and 80-cent a barrel premium to U.S. crude futures CLc1
* WTI at East Houston WTC-MEH, also known as MEH, traded between a $1.00 and $1.40 a barrel premium to U.S. crude futures CLc1
* ICE Brent September futures LCOc1 rose $1.43 to settle at $81.07 a barrel on Friday.
* WTI September crude CLc1 futures rose $1.42 to settle at $77.07 a barrel on Friday.
* The Brent/WTI spread WTCLc1-LCOc1 narrowed 3 cents to minus $3.99, after hitting a high of minus $3.85 and a low of minus $4.05.
Source: Reuters (Reporting by Arathy Somasekhar in Houston; Editing by Richard Chang)