Physically traded domestic crude grades fell on Friday, dealers said, as the WTI/Brent spread narrowed, making transatlantic arbitrage economics less workable for traders.
The spread between U.S. West Texas Intermediate and Brent crude narrowed to as little as minus $3.23 per barrel during the session, its smallest discount since Sept. 30, according to LSEG.
A narrower spread between WTI and the global benchmark, particularly under minus $4 typically discourages transatlantic demand as traders see a closed arbitrage.
Domestically, U.S. energy firms this week kept the number of oil and natural gas rigs unchanged for the fourth week in a row, energy services firm Baker Hughes said in its closely followed report.
The oil and gas rig count, an early indicator of future output, stayed at 589 in the week to Jan. 3 Baker Hughes said oil rigs were down one rig to 482 this week, while gas rigs rose by one to 103.
On the refining side, U.S. oil refiners are expected to have about 240,000 barrels per day (bpd) of capacity offline in the week ending Jan. 3, decreasing available refining capacity by 199,000 bpd, research company IIR Energy said.
Offline capacity is expected to rise to 961,000 bpd in the week ending Jan. 10 and then to 1.61 million bpd in the subsequent week, IIR added.
* Light Louisiana Sweet (WTC-LLS) for February delivery was steady at a midpoint of a $2.25 premium and was seen bid and offered between a $2.15 and $2.35 a barrel premium to U.S. crude futures CL1!
* Mars Sour (WTC-MRS) fell 5 cents to a midpoint of a 20-cent premium and was seen bid and offered between a 10-cent and 30-cent a barrel premium to U.S. crude futures CL1!
* WTI Midland (WTC-WTM) fell 10 cents to a midpoint of a 65-cent premium and was seen bid and offered between a 55-cent and 75-cent a barrel premium to U.S. crude futures CL1!
* West Texas Sour (WTC-WTS) fell 7 cents to a midpoint of a 15-cent discount and was seen bid and offered between discount of 30 cents and parity to U.S. crude futures
* WTI at East Houston (WTC-MEH), also known as MEH, traded between a 80-cent and $1.00 a barrel premium to U.S. crude futures
* ICE Brent March futures rose 58 cents to settle at $76.51 a barrel on Friday
* WTI February crude futures rose 83 cents to settle at $73.96 a barrel
* The Brent/WTI spread (WTCLc1-LCOc1) narrowed 13 cents to last trade at minus $3.30, after hitting a high of minus $3.23 and a low of minus $3.41.
Source: Reuters