Gulf Coast oils on the spot market strengthened after reaching four-month lows last week as the spread widened between U.S. and European benchmark crudes.
The discount of West Texas Intermediate to Brent widened as much as 4.4 percent after narrowing to $17.08 a barrel on Jan. 11, the smallest gap since Aug. 28, after the Seaway pipeline began flowing at expanded rates to Houston from Cushing, Oklahoma. When Brent gains versus WTI, it typically strengthens the value of U.S. grades that compete with foreign oils priced against the European benchmark.
Light Louisiana Sweet, the benchmark low-density, low-sulfur crude on the U.S. Gulf Coast, strengthened 45 cents to a $16.45-a-barrel premium to WTI in Cushing at 4:22 p.m. New York time, according to data compiled by Bloomberg. Heavy Louisiana Sweet also added 45 cents to its premium, to $16.55 a barrel.
The expanded Seaway line will be able to carry 400,000 barrels a day, easing a glut of crude in the U.S. Midwest and offering a less-expensive alternative to LLS and light imports from West Africa.
Mars Blend, a medium-gravity, high-sulfur crude from the Gulf of Mexico, strengthened 60 cents to a $12.60-a-barrel premium to WTI. Poseiden’s premium grew 30 cents to $12.60 a barrel. Southern Green Canyon added 35 cents to its premium, bringing it to $12.75a barrel. And Thunder Horse widened its premium 65 cents to $15.40 a barrel.