Light Louisiana Sweet Strengthens on Seaway Capacity ConstraintsEdward Welsch
Light Louisiana Sweet crude produced in the Gulf of Mexico gained versus West Texas Intermediate as the U.S. benchmark dropped after Seaway pipeline’s ability to ship oil south from the Midwest was limited.
Enterprise Products Partners LP said capacity on its Seaway pipeline that links the Cushing, Oklahoma, oil storage hub to the Gulf Coast had run into “unforeseen constraints.”
WTI’s discount to international benchmark Brent increased after Enterprise said in a notice to shippers that deliveries into its Jones Creek, Texas, terminal south of Houston would be limited to 175,000 barrels a day. The line was in the process of increasing to 400,000 barrels a day.
The spread widened $1.83 a barrel to $17.57 a barrel, based on settlement prices. Light Louisiana Sweet strengthened by 75 cents to $19.75 above WTI as of 2:31 p.m, according to data compiled by Bloomberg.
WTI’s discount to Brent had narrowed to $15.16 Jan. 17 from more than $25 in November after Seaway finished the expansion, increasing the amount of crude oil that shippers can send from the over-supplied depot in Cushing to refineries in the Texas.