West Texas Crudes Weaken as Refinery Planned Maintenance BeginsDan Murtaugh
West Texas Sour crude weakened to a seven-month low relative to the U.S. benchmark as output returned in the Gulf of Mexico and refinery maintenance in the region reduced demand for crudes from the Permian Basin.
WTS, a low-density, high-sulfur crude out of the basin in western Texas, weakened by $1.05 to a discount of $3.25 a barrel below West Texas Intermediate at 1:56 p.m., according to data compiled by Bloomberg.
Only 91,000 barrels daily of Gulf oil production was shut in today as a result of Tropical Storm Karen, the U.S. Bureau of Safety and Environmental Enforcement said in a website posting. More than 2.9 million barrels had been halted over the previous four days.
Valero Energy Corp. began maintenance at its refinery in Three Rivers, Texas, over the weekend, Bill Day, a San Antonio-based company spokesman, said by e-mail yesterday.
The 100,000-barrel-a-day plant uses primarily Eagle Ford crude, which can be piped to Houston. Crude from the Permian Basin, the largest oil field in the U.S., also moves to the Houston area on pipelines that went into service this year from Magellan Midstream Partners LP and Sunoco Logistics Partners LP.
Refineries in Louisiana and Texas with a combined capacity of 2.3 million barrels are undergoing planned maintenance during October, according to data compiled by Bloomberg.
WTI in Midland, Texas, weakened against the benchmark grade in Cushing, Oklahoma, falling 45 cents to a discount of $1.75 a barrel.
Canadian Syncrude weakened by 25 cents to a discount of $12 a barrel to WTI in Cushing after Suncor Energy Inc. completed maintenance on an upgrader in Fort McMurray, Alberta. Upgraders convert heavy crude into the light synthetic.
Western Canada Select, a heavy, sour blend of Canadian crudes, strengthened by 50 cents to a discount of $32.50 below WTI.