U.S. Gulf Crudes Strengthen as WTI-to-Brent Spread Widens

U.S. Gulf crude premiums widened as West Texas Intermediate weakened compared to its European counterpart.

The gap between April-delivery WTI futures and Brent, the basis for European and West African crudes, widened $1.49 to $11.85 at 12:50 p.m. in New York. The differential settled at a record $15.94 Feb. 16. The spread averaged 63 cents in 2010.

When Brent is higher than WTI, it strengthens the value of low-sulfur U.S. grades that compete with West African oils priced against Brent.

Among Gulf Coast sour, or high-sulfur, grades, Mars Blend’s premium to WTI strengthened $1 to $12 a barrel, while Poseidon’s premium widened $1.85 to $12.35 over the benchmark, according to data compiled by Bloomberg at 12:17 p.m.

Southern Green Canyon’s premium was unchanged at $11 a barrel. Thunder Horse’s premium to WTI strengthened $2.50 to $16.50. West Texas Sour’s discount narrowed 50 cents to $5. WTS is delivered in Midland, Texas, so its price is less influenced by imports.

Light Louisiana Sweet’s premium narrowed 10 cents to $17.40 a barrel. Heavy Louisiana Sweet’s premium to WTI weakened 25 cents to $17.

Syncrude’s premium was unchanged at $7.75 a barrel. Syncrude is a light, low-sulfur synthetic oil derived from the tar sands in Alberta. The discount for Western Canada Select was unchanged at $24.50.

Enbridge Inc. said yesterday it planned to allocate space on five pipelines for March shipments because demand for crude shipments exceeds capacity.

Line 5, which runs from Superior, Wisconsin, to Sarnia, Ontario, and has a capacity of 490,000 barrels a day, will be able to meet 81 percent of next month’s orders to move oil, said Gina Jordan, a spokeswoman for the Calgary-based company.

Line 6B, which has a capacity of 290,000 barrels a day and runs between Griffith, Indiana, and Sarnia, Ontario, can meet 86 percent of shipper requests for February.

To contact the reporter on this story: Aaron Clark in New York at aclark27@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

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