West Texas Sour Strengthens as Permian Pipelines Prepared

West Texas Sour crude strengthened for a second day as Sunoco Logistics Partners LP (SXL) and Magellan Midstream Partners LP (MMP) prepared to expand pipeline capacity from the Permian Basin to Houston.

WTS’s discount to U.S. benchmark West Texas Intermediate narrowed $3.50 a barrel to $8.50 at 2:09 p.m. New York time, according to data compiled by Bloomberg. It was the smallest margin since Nov. 29. WTI in Midland gained $3 a barrel to $6.50 under WTI in Cushing.

Light Louisiana Sweet, the benchmark low-density, low- sulfur crude on the Gulf Coast, weakened 15 cents to a $16.20-a- barrel premium to WTI at Cushing. Heavy Louisiana Sweet oil’s premium to WTI also shrank 15 cents, to $16.30.

Mars Blend, a medium-gravity, high-sulfur crude from the Gulf of Mexico, was unchanged at a $12.50 premium to WTI. Poseidon’s premium to WTI narrowed by 25 cents to $12.45 a barrel. Thunder Horse’s weakened by 40 cents to $14.40. Southern Green Canyon’s premium widened 15 cents to $12.25.

The differential between WTI and Brent widened by 16 cents to $15.16 a barrel based on March settlement prices .

WTI’s discount to Brent has narrowed from $25.53 on Nov. 15 after Enterprise Product Partners LP (EPD) and Enbridge Inc. (ENB) expanded service Jan. 11 on the Seaway pipeline. It spans 500 miles (805 kilometers) from Cushing to Freeport, Texas.

Canadian Crude

Syncrude, a light synthetic oil processed from oil-sands bitumen, weakened for a second day on light volume. It moved to a 65-cent discount from a 15-cent premium to WTI yesterday, according to data provided by Calgary oil broker Net Energy Inc. The discount for Western Canada Select, a heavy bitumen blend, strengthened by 50 cents to $36.50.

February trading in Canadian grades ends tomorrow, a few business days before nominations are due for space on export pipeline shipments to the U.S.

To contact the reporter on this story: Eliot Caroom in New York at ecaroom@bloomberg.net

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

Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.