Bakken Oil Plunges on Illinois Refinery Work, Pipe Restrictions

Bakken oil’s premium to West Texas Intermediate plunged after Marathon Petroleum Corp. (MPC) advanced maintenance at its Illinois refinery and TransCanada Corp. (TRP) planned to restrict some oils on its Keystone pipeline in July.

Marathon will shut a crude unit at its Robinson refinery in Illinois about June 9, a person familiar with the situation said June 1. The work was previously scheduled for July, according to the person.

TransCanada plans to temporarily restrict crudes on the Keystone pipeline with a Reid vapor pressure exceeding 8.5 pounds per square inch starting July 1, a person with knowledge of the plans said May 31. Light sweet crudes typically have higher vapor pressures than heavy oils.

Bakken oil’s discount widened $4.50 a barrel to $12 below U.S. benchmark WTI at 1:31 p.m. in New York, according to data compiled by Bloomberg. That’s the cheapest the graded has traded since March 23.

Syncrude’s discount to WTI widened $3.75 a barrel to $9, the cheapest the grade has traded since March 22. Western Canada Select’s discount widened $5.25 to $25 a barrel below the U.S. benchmark.

Most U.S. Gulf Coast crude grades also weakened. Light Louisiana Sweet’s premium to WTI lost 10 cents to $11.90 a barrel. Heavy Louisiana Sweet’s premium decreased 15 cents to $14.50 a barrel.

Mars Blend’s premium narrowed 35 cents to $9.75. Southern Green Canyon’s premium lost 25 cents to $9.50. Poseidon’s premium decreased 25 cents to $8.75.

The premium for Thunder Horse, a sour crude with lower sulfur content than Mars, Poseidon and Southern Green Canyon, widened 40 cents to $11.80 a barrel.

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