Two sour oils produced in the Gulf of Mexico weakened against domestic benchmark West Texas Intermediate on speculation that Motiva Enterprises LLC’s Convent refinery in Louisiana may shut a unit for a month following a fire.
The premiums for Eugene Island crude and Bonito Sour, which are delivered in St. James, Louisiana near Convent, narrowed 50 cents to 50 cents over WTI at 2:53 p.m. in New York, according to data compiled by Bloomberg.
“Sours obviously are coming down because we think Motiva’s going to pull back,” said Carl Larry, president of Oil Outlooks & Opinions LLC in Houston.
The two sours are delivered through Royal Dutch Shell Plc pipelines. Shell is a joint owner of the Convent refinery, as well as the Motiva Port Arthur refinery in Texas, which also had a unit down.
The premium of Light Louisiana Sweet gained 10 cents on WTI to $3.50 a barrel, and the premium for Heavy Louisiana Sweet over WTI grew 5 cents to $3.25 a barrel.
Poseidon strengthened against WTI, narrowing its discount 55 cents to $3 a barrel, and Mars Blend strengthened 40 cents, to a $2 a barrel discount to WTI. Southern Green Canyon rose 50 cents a barrel to a $2.90 discount.
The premium for Thunder Horse, which has a lower sulfur content than Mars, Poseidon and Southern Green Canyon, rose 25 cents a barrel to $1.25 over WTI.