Light Louisiana Sweet and other Gulf Coast crudes traded lower against domestic benchmark West Texas Intermediate after Brent crude weakened versus WTI and tanks were filled for a new pipeline to the Houston area.
Light Louisiana Sweet’s premium over WTI fell by $4.50 to $15.50 a barrel at 2:10 p.m. in New York, the largest drop since Nov. 20.
“With all the pessimistic news in the European market, Brent started coming down and traders probably bailed out a little bit on open interest,” said Sarah Emerson, president of Energy Security Analysis Inc. in Wakefield, Massachusetts. “It took a while for LLS to catch up. It’s still $2 above Brent, and I suspect it will come down some more.”
The Brent-WTI spread touched $12.52 a barrel in New York, the narrowest premium for Brent since July 5, according to data compiled by Bloomberg.
Magellan Midstream Partners LP filled oil tanks for delivery on the Longhorn Pipeline and was making final preparations to transfer oil into the line, a company spokesman said yesterday. The reversed conduit will initially pump as much as 75,000 barrels of crude a day to Houston from Crane, in western Texas.
Mars Blend, a medium sour crude from the Gulf, weakened by $2.05 to a premium of $11.20 a barrel against WTI. Poseidon’s premium fell $1.90 to $10.85. Southern Green Canyon slid $2.15 to a premium of $9.35 and Thunder Horse weakened by $1.65 to $13.70 a barrel.
Heavy Louisiana Sweet oil’s premium to WTI weakened $2.60 to $16.40, and Eugene Island weakened $2.25 a barrel to a premium of $13.75.