Gulf Coast sour crude grades weakened against the U.S. benchmark West Texas Intermediate as WTI’s discount to Brent crude reached a two-week low.
The discount eased 19 cents to $19.70 a barrel based on December settlement prices, down from $23.95 on Oct. 15. It was the fourth straight day that WTI strengthened against Brent.
Southern Green Canyon crude’s premium to WTI narrowed $1.50 to $11.50 a barrel at 4:19 p.m., according to data compiled by Bloomberg. The premium for Thunder Horse fell $1 to $17.50 a barrel. The medium-grade crudes compete with seaborne imports.
“It has to do with the narrowing of the WTI-Brent spreads,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston. “When that narrows, you see that the grades in the Gulf lose some of their premium.”
Canadian crudes were mixed after declining yesterday as TransCanada Corp. (TRP) shut the 590,000-barrel-a-day Keystone oil pipeline for repairs. TransCanada said today that bad weather is making it harder to get equipment to the repair site at a section of the pipeline connecting Missouri and Illinois. The line is expected to be working by tomorrow, James Millar, a company spokesman, said in an e-mail.
The premium of Syncrude, a synthetic light blend, to WTI fell 25 cents to 75 cents a barrel, after dropping $2.35 yesterday. The discount of Western Canada Select, a heavy crude grade, narrowed 50 cents to $20 after widening $5 yesterday.
The Canadian crudes “could still fall off more, especially if Keystone is down more than three days,” Lipow said.
WTI Midland’s discount widened 70 cents to $3.10 a barrel. Heavy Louisiana Sweet’s premium increased 40 cents to $19.40. Light Louisiana Sweet’s premium widened 20 cents to $20.
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