Light Louisiana Sweet and Heavy Louisiana Sweet oils from the U.S. Gulf of Mexico lost value on the spot market as the margin between Brent crude and West Texas Intermediate narrowed.
WTI’s discount to Brent shrank by $1 a barrel to $18.22 a barrel, based on February settlement prices. When Brent loses ground to WTI, it typically weakens the value of U.S. grades that compete with foreign oils priced versus Europe’s benchmark.
WTI’s discount to Brent has narrowed from $25.53 on Nov. 15 with the Seaway pipeline expansion almost complete. Enterprise Products Partners LP and Enbridge Inc., the line’s joint owners, plan to resume service next week and carry as much as 400,000 barrels a day from the WTI delivery point of Cushing, Oklahoma, to the Houston area.
Light Louisiana Sweet’s premium to WTI narrowed $1 to $17.75 a barrel at 3:59 p.m. New York time, according to data compiled by Bloomberg. The premium for Heavy Louisiana Sweet shrank $1.20 to $17.60.
Sour crudes from the Gulf also weakened against WTI. The premium narrowed 75 cents to $15.50 a barrel for Thunder Horse, 40 cents to $13.40 for Mars Blend, 65 cents to $13.35 for Poseidon, and 35 cents to $13.65 for Southern Green Canyon.
The strengthening of WTI against Brent also put pressure on the price of Canadian crudes against the U.S. benchmark. Syncrude, a synthetic light oil derived from oil-sands bitumen, dropped 75 cents to 25 cents above WTI, according to Net Energy Inc., a Calgary oil broker. Western Canada Select, a heavy blend produced mainly from bitumen, slipped 35 cents to a $36.25 discount.
The discount for West Texas Sour to WTI widened $2 a barrel to $15.50, while WTI in Midland sank $1.50 to $12 under WTI in Cushing.
HollyFrontier Corp. planned heavy maintenance at its Navajo refinery in Artesia, New Mexico, beginning in January, company officials said Nov. 7. The refinery processes crudes from West Texas and Cushing.