U.S. cash crude grades held steady on Friday, even as the U.S. government plans to buy back more crude oil to refill the nation’s emergency reserve.
WTI Midland and Mars Sour were both unchanged.
The U.S. energy department said it plans to announce a proposal to purchase crude oil to refill the Strategic Petroleum Reserve (SPR) next week, for delivery in October and November.
The government has so far bought 6.2 million barrels of sour crude oil.
The SPR refills, along with high export demand for sour crude, has pushed Mars to trade at a premium to U.S. crude oil futures.
Analysts at Energy Aspects said upcoming SPR returns and threat of hurricanes could rapidly tighten availability of Mars-quality barrels in the third quarter.
Meanwhile, U.S. crude’s discount to Brent widened slightly but remained range bound. A wider discount makes U.S.-linked crudes more attractive to foreign buyers.
In refining news, Marathon Petroleum Corp is restarting on Friday the gasoline-producing fluidic catalytic cracker 3 (FCCU-3) at its Galveston Bay Refinery in Texas City, Texas, sources said.
The July 4 holiday on Tuesday means next week will be a shortened trading week, which typically results in lighter volumes.
* Light Louisiana Sweet for August delivery gained 5 cents at a midpoint of a $2.60 premium and was seen bid and offered between a $2.40 and $2.80 a barrel premium to U.S. crude futures CLc1
* Mars Sour was unchanged at a midpoint of a $1.30 premium and was seen bid and offered between a $1.20 and $1.40 a barrel premium to U.S. crude futures CLc1
* WTI Midland was unchanged at a midpoint of a $1.50 premium and was seen bid and offered between a $1.40 and $1.60 a barrel premium to U.S. crude futures CLc1
* West Texas Sour fell 2.5 cents at a midpoint of a 85-cent premium and was seen bid and offered between a 70-cent and $1.00 a barrel premium to U.S. crude futures CLc1
* WTI at East Houston, also known as MEH, traded between a $1.50 and $2.00 a barrel premium to U.S. crude futures CLc1
* ICE Brent August futures rose 56 cents to settle at $74.9 a barrel on Friday.
* WTI August crude futures rose 78 cents to settle at $70.64 a barrel on Friday.
* The Brent/WTI spread widened 14 cents to minus $4.62, after hitting a high of minus $4.62 and a low of minus $4.63.
Source: Reuters (Reporting by Stephanie Kelly; Editing by Richard Chang)