U.S. crude differentials largely eased on Friday as the spread between the U.S West Texas Intermediate crude and global benchmark Brent narrowed to its smallest in nearly three weeks.
WTI Midland and WTI at East Houston, also known as MEH, weakened 10 cents each. Mars Sour WTC-MRS eased 20 cents.
The Brent/WTI spread narrowed 35 cents to minus $4.88, after hitting a high of minus $4.87 and a low of minus $5.19. It traded above minus $5 for the first time since Dec 18.
A narrowed spread makes U.S. crude less attractive to foreign buyers.
The U.S. oil rig count, an indicator of future supply, rose by 1 to 501 this week, Baker Hughes BKR.O said.
In a move that could boost Chinese demand for U.S. crude, China’s oil trade with Iran has stalled as Tehran withholds shipments and demands higher prices from its top client, tightening cheap supply for the world’s biggest crude importer, refinery and trade sources said.
Across the world, Angolan cargoes continued to sell steadily this week as the trading cycle got underway, as demand for West African crude was buoyed while Middle East tensions continued to plague the Red Sea shipping route.
OPEC oil output rose in December, a Reuters survey found on Friday, as increases in Iraq, Angola and Nigeria offset ongoing cuts by Saudi Arabia and other members of the wider OPEC+ alliance to support the market.
In refining news, Motiva Enterprises is scheduled to shut the large crude distillation unit (CDU) and large coker at its 626,000 barrel-per-day (bpd) Port Arthur, Texas, refinery by Monday, people familiar with the company’s plans said on Friday.
Light Louisiana Sweet for February delivery fell 20 cents to a midpoint of a $2.30 premium and was seen bid and offered between a $2.20 and $2.40 a barrel premium to U.S. crude futures
Mars Sour fell 20 cents to a midpoint of a 70-cent premium and was seen bid and offered between a 50-cent and 90-cent a barrel premium to U.S. crude futures.
WTI Midland fell 10 cents to a midpoint of a $1.35 premium and was seen bid and offered between a $1.20 and $1.50 a barrel premium to U.S. crude futures.
West Texas Sour gained 30 cents to a midpoint of a 25-cent premium and was seen bid and offered between parity and 50-cent a barrel premium to U.S. crude futures.
WTI at East Houston, also known as MEH, traded between a $1.70 and $2.00 a barrel premium to U.S. crude futures
ICE Brent March futures rose $1.17 to settle at $78.76 a barrel on Friday.
WTI February crude CLc1 futures rose $1.62 to settle at $73.81 a barrel on Friday.
The Brent/WTI spread narrowed 35 cents to minus $4.88, after hitting a high of minus $4.87 and a low of minus $5.19.
Source: Reuters (Reporting by Arathy Somasekhar in Houston; editing by Jonathan Oatis)