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Bakken Oil Weakens to a Discount as North Dakota Output Rises

Bakken oil from North Dakota weakened to a discount to West Texas Intermediate for the first time in more than eight months as output rose to a record and inventories in the U.S. Midwest increased.

North Dakota production reached a record 444,142 barrels a day of oil in August, up 4.5 percent from the previous month, according to the state’s Industrial Commission.

In the Midwest, or PADD 2 region, oil inventories rose 1.25 million barrels, or 1.4 percent, to 93.2 million Oct. 28, according to the Energy Department. That’s the highest level for this time of the year in at least a decade.

Bakken crude weakened $3.13 to a discount of $1.88 compared with WTI at 1:59 p.m. in New York, according to data compiled by Bloomberg. The last time the grade traded at a discount to the U.S. benchmark was Feb. 28.

Bakken also declined as Syncrude, a light, low-sulfur synthetic oil, traded at $6 a barrel, 38 percent lower than its average of $9.67 this year.

Syncrude’s premium to WTI added 60 cents today from $5.40 Nov. 4, the lowest level since February. The discount for Western Canada Select widened 5 cents to $12.05 a barrel.

In the U.S. Gulf Coast, premiums to WTI widened as Brent crude on ICE Futures Europe rose faster than the U.S. benchmark, making imports from West Africa more expensive.

Heavy Louisiana Sweet’s premium strengthened $1.95 to $20.10 a barrel while Light Louisiana Sweet increased $1.75 a barrel to $20.25 above WTI.

The premium for Mars Blend added $1.55 to $16.25 a barrel. Poseidon gained $1.25 to $16.10 a barrel over WTI.

Southern Green Canyon’s premium increased $1.25 to $15.25 a barrel and West Texas Sour was unchanged at 60 cents below WTI. Thunder Horse added $1.15 to $17.40 over the benchmark.

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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