West Texas Sour oil strengthened against the benchmark West Texas Intermediate to the smallest discount since Oct. 11 as operators of the Seaway Pipeline reported a pinhole leak to regulators.
Enterprise Product Partners LP reported that crude oil spilled from a “pinhole leak” in the Seaway pipeline at Colbert Station in Bryan, Oklahoma. Western Refining Inc.’s El Paso, Texas, refinery and Alon USA Energy Inc.’s Big Spring, Texas, plant were undergoing maintenance.
Demand for West Texas Sour has gained because “Seaway is unreliable at this point,” said Carl Larry, president of Houston-based Oil Outlooks & Opinions LLC. “More people are looking to find not cheap crude, but something that’s viable that they can use while this gets resolved. As they’re heading into maintenance, they’re looking to manage their margins as best they can.”
Crudes produced in the Gulf of Mexico weakened as WTI strengthened against Brent, the global oil benchmark. Offshore domestic crudes tend to weaken along with Brent, which is used to price competing overseas imports.
Light Louisiana Sweet’s premium to WTI narrowed $1.35 to $20.55 a barrel, and Heavy Louisiana Sweet’s premium fell 75 cents to $20.50.
Mars Blend’s premium fell 85 cents to $14.70. Thunder Horse, a sour crude with lower sulfur content than Mars, weakened 25 cents to a premium of $18.50. Southern Green Canyon’s premium slipped by 75 cents to $13.75.
Western Canada Select, a blend of oil-sands bitumen, strengthened $1.15 against WTI to a $23.85 discount, according to Calgary oil broker Net Energy Inc.
Syncrude, a synthetic light, sweet oil upgraded from bitumen, strengthened by $1 a barrel to a $2.50 premium to WTI, Net Energy said.
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