Heavy Louisiana Sweet and other Gulf Coast crudes weakened the most in a month against West Texas Intermediate after the southern leg of TransCanada Corp. (TRP)’s Keystone XL pipeline began deliveries to Texas from Cushing, Oklahoma.
The line is now transporting 288,000 barrels a day of U.S. light, sweet oil to Nederland, Texas, adding to crude supplies in PADD 3, the Gulf Coast region. Those stocks climbed last week by 870,000 barrels to 161.9 million, the first increase since Nov. 22, a government report showed.
“Increased pipeline capacity from Cushing to the Gulf, coupled with a heavier-than-normal spring turnaround season, should help to rebuild inventories in the region over the near term,” Mike Tran, a New York-based oil analyst at CIBC World Markets Corp., said in a report yesterday.
Heavy Louisiana Sweet weakened by $3 a barrel to an $11.50 premium against U.S. benchmark WTI at 1:17 p.m., according to data compiled by Bloomberg. That’s down from a nine-month high of $14.70 reached on Jan. 22.
The Keystone southern leg will ramp up over the course of the year toward a daily 700,000-barrel capacity and carry more heavy Canadian oil, company executives said this week.
Light Louisiana Sweet, the light, sweet benchmark on the Gulf Coast, fell $2.50 a barrel to a premium of $10 a barrel against WTI. Bonito Sour and Eugene Island both dropped $2.75 to premiums of $8.
Mars Blend weakened $1.25 a barrel to a $7 premium against WTI and Poseidon crude slid $1.10 to trade at $6.25 above WTI.