Poseidon crude from the Gulf of Mexico strengthened against West Texas Intermediate as the WTI-Brent spread widened after Enbridge Inc. restarted a pipeline section and inventories in Oklahoma grew.
Enbridge restarted part of Line 18 in Alberta after shutting it over the weekend after a spill was discovered on an adjacent line. The restart increases the amount of Canadian oil Enbridge can transport to U.S. Midwest refineries, reducing their demand for the U.S. benchmark West Texas Intermediate oil in Cushing, Oklahoma.
The Energy Department reported that crude oil inventories in Cushing rose 664,000 barrels last week, the first increase in four weeks and the largest since April 12.
Brent’s premium to WTI grew to $6.16 a barrel today after settling yesterday at $5.94, the lowest level since January 2011. Poseidon and other Gulf of Mexico crudes compete with foreign oils priced against Brent for space in U.S. refineries.
Poseidon, a medium sour crude delivered to Houma, Louisiana, strengthened by $1.25 to a premium of $1.15 a barrel versus WTI at 1:58 p.m., according to data compiled by Bloomberg. It’s the first time Poseidon gained against WTI since June 19.
Mars Blend, Southern Green and Thunder Horse, all medium-density crudes from the Gulf, also strengthened against WTI.
Light Louisiana Sweet, the light, sweet benchmark on the Gulf Coast, weakened 30 cents to a premium of $7.60 a barrel to WTI. Heavy Louisiana Sweet strengthened by 65 cents to a premium of $7.50.