Sour crude Mars strengthened on Friday as the U.S. government speeds up its purchasing of crude oil to replenish the Strategic Petroleum Reserve.
Mars Sour WTC-MRS gained 15 cents, while WTI Midland remained unchanged and WTI at East Houston WTC-MEH, also known as MEH, eased 10 cents.
The Department of Energy on Friday issued two solicitations to buy a combined 6 million barrels of crude for delivery to its Bayou Choctaw site in Louisiana from September through December.
If those offers and previously announced ones are fulfilled, the department’s purchasing rate would increase to about 4.5 million barrels per month for September, October and November from about 3 million barrels now.
The department typically purchases sour crude such as Mars.
Meanwhile, the Brent/WTI spread narrowed 23 cents after 4 days of widening. A narrower spread makes U.S. crude less attractive to foreign buyers.
Oil rigs fell four to 492 this week, also their lowest since January 2022, Baker Hughes said.
Across the world, China’s crude oil imports fell 8.7% in May from a year earlier, official data showed on Friday, as refiners scaled back purchases amid heavy plant overhauls, subdued profit margins, and weak demand for refined oil products.
Light Louisiana Sweet for July delivery fell 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.
Mars Sour gained 15 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.
WTI Midland was unchanged at 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.
West Texas Sour gained 10 cents at a midpoint of a parity and was seen bid and offered between a discount of 20 cents and 20-cent a barrel premium to U.S. crude futures.
WTI at East Houston WTC-MEH, also known as MEH, traded between a $1.20 and $1.60 a barrel premium to U.S. crude futures.
ICE Brent August futures LCOc1 fell 25 cents to settle at $79.62 a barrel on Friday.
WTI July crude CLc1 futures fell 2 cents to settle at $75.53 a barrel on Friday.
The Brent/WTI spread WTCLc1-LCOc1 narrowed 23 cents to minus $4.40, after hitting a high of minus $4.39 and a low of minus $4.62.
Source: Reuters (Reporting by Arathy Somasekhar in Houston, Editing by Matthew Lewis)