Gulf Oils Weaken as Brent Output Increase Narrows Spread to WTIDan Murtaugh
Gulf of Mexico oils on the spot market weakened against futures as Brent’s discount to West Texas Intermediate narrowed after a pipeline system in the North Sea returned from an unplanned five-day shutdown.
The Brent Pipeline System is approaching its targeted flow rate of 80,000 barrels a day, an official for Abu Dhabi National Energy Co. said. Brent’s premium to WTI, the U.S. benchmark crude, narrowed as much as 6.7 percent. Gulf crudes compete for space in coastal U.S. refineries with foreign oils priced against Brent, the European benchmark.
Light Louisiana Sweet oil’s premium to WTI futures traded on the New York Mercantile Exchange weakened by 70 cents at 1:57 p.m. in New York to $20.50 a barrel, according to data compiled by Bloomberg. The premium for Heavy Louisiana Sweet narrowed by 40 cents to $21.20 a barrel.
Mars Blend, a medium sour crude from the Gulf, weakened by 85 cents to a premium of $15.55 a barrel. Poseidon and Southern Green oils slid 85 cents each, to premiums of $15.75 and $13.55 a barrel, respectively. Thunder Horse weakened by $1.10 to $18.40 a barrel more than the U.S. benchmark.