Bloomberg News

U.S. Gulf Coast Oils Strengthen as WTI-Brent Spread Fluctuates

October 27, 2011

Oct. 27 (Bloomberg) -- U.S. Gulf Coast oils strengthened against West Texas Intermediate for the first time in five days as the U.S. benchmark West Texas Intermediate’s discount to European counterpart Brent crude fluctuated.

WTI’s discount increased as much as 67 cents before narrowing 50 cents to $18.21 a barrel under Brent at 5:19 p.m. New York time, according to data compiled by Bloomberg. Low- sulfur U.S. grades typically gain when Brent increases versus WTI because they compete with West African cargoes priced against Brent.

“That’s all that could be driving the Gulf today,” Andy Lipow, president of Lipow Oil Associates LLC in Houston, said in a telephone interview.

Heavy Louisiana Sweet’s premium to WTI climbed 15 cents to $19.90 a barrel over WTI at 4:29 p.m. New York time, according to data compiled by Bloomberg. The fuel’s premium narrowed $1.50 yesterday after the Energy Department said crude oil imports on the Gulf Coast jumped 12 percent last week.

“Usually, those Gulf Coast refineries are trying to get rid of their oil for tax purposes at the end of the year, so we’re all scratching our heads for answers,” Tim Evans, an energy analyst at Citi Futures Perspective in New York, said in a telephone interview. “The only thing left would be some traders caught short.”

Light Louisiana Sweet’s premium rose 15 cents to $20.50 above the U.S. benchmark, the fuel’s first gain in five days.

Mars Blend

The premium for Mars Blend rose 25 cents to $16.50 a barrel, and Poseidon gained 60 cents to $16.35 a barrel over the U.S. benchmark.

Southern Green Canyon’s premium increased 25 cents to $15.50 a barrel. West Texas Sour’s discount was unchanged at 75 cents, and Thunder Horse’s premium strengthened 20 cents to $18.60 above the benchmark.

The discount for Western Canada Select narrowed 20 cents to $11.80 a barrel below the U.S. benchmark.

The premium for Syncrude, a light, low-sulfur synthetic oil derived from the tar sands in Alberta, was unchanged at $7 a barrel above WTI.

Nexen Inc. shut the 60,000-barrel-a-day upgrader at the Long Lake oil-sands complex in Alberta to repair an air- separation unit, Patti Lewis, a Calgary-based spokeswoman for the company, said in a telephone interview today. Nexen is conducting inspections before establishing a schedule for repair work, she said.

The premium for Alaska North Slope fell $3.95 to $20.25 a barrel above WTI.

--Editors: David Marino, Dan Stets

To contact the reporter on this story: Lynn Doan in San Francisco at ldoan6@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net


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