U.S. Gulf Coast crude premiums fell for a third day against the benchmark West Texas Intermediate after the Energy Department said the region’s oil inventories rose to a seven-month high and refineries used less of the fuel.
Crude oil stocks on the Gulf Coast climbed for the sixth week, by 885,000 barrels to 180 million, the highest level since Sept. 2, the Energy Department said today. Refinery utilization rates in the region slipped for the second week to 83.7 percent, the agency said.
Light Louisiana Sweet’s premium to West Texas Intermediate dropped $1.10 to $17 a barrel at 12:42 p.m. New York time, according to data compiled by Bloomberg. Heavy Louisiana Sweet lost $1.50 to a $16.25-a-barrel premium versus spot WTI prices.
“Across the board, we’re seeing inventory increases of crude,” Andy Lipow, president of Lipow Oil Associates LLC in Houston, said in a telephone interview. “Refinery utilization is also down, so that’s probably created a temporary glut of crude on the Gulf Coast.”
Thunder Horse’s premium narrowed 95 cents to $13.35 a barrel above WTI, and Mars Blend slipped 70 cents to a premium of $9.30.
Poseidon’s premium decreased 85 cents to $8.25, and Southern Green Canyon’s narrowed 35 cents to $8.
Western Canada Select’s discount narrowed for the second day, by 40 cents to $16.60 a barrel, the highest level for the crude since January. Syncrude strengthened $1.20 to a discount of 80 cents a barrel versus WTI, also the highest level for the fuel since January.
Bakken oil’s discount was unchanged at $7.