Oils produced in the Gulf of Mexico strengthened for a ninth day as Brent crude surged to a nine- month high in London.
Light Louisiana Sweet oil advanced $1.35 to a $22.35 premium to U.S. benchmark West Texas Intermediate crude oil at 11:55 a.m. in New York, according to data compiled by Bloomberg. It was the longest streak of gains for the grade since July. Heavy Louisiana Sweet increased $1.30 to a premium of $22.45 a barrel.
Offshore oils strengthened as the spread between the price of WTI and Brent, the global oil benchmark, widened by $1.73 a barrel to a $23.14 premium for Brent as of 2:27 p.m. A rising Brent price tends to boost U.S. offshore domestic oils, which compete with overseas imports.
Brent rose as China’s crude imports increased to the highest level in eight months, customs figures showed.
Other offshore grades also strengthened. Mars Blend, a sour offshore grade, added $1.60 to $16.35 over WTI. Thunder Horse, a sour crude with lower sulfur content than Mars, gained $1.70 to a $20.20 premium. Southern Green Canyon’s premium gained by 90 cents to $15.30.
Canadian heavy oil strengthened for a fifth day as export pipelines carrying the grade were less congested in February than prior months. Western Canada Select, a heavy bitumen blend, gained 75 cents to a $24.25 discount against West Texas Intermediate, according to Calgary oil broker Net Energy Inc.
Apportionment on Canada’s largest oil export pipelines to the U.S., a measure of demand for space on the lines, declined for a third month in February. Extra production from the Kearl oil sands project in Alberta was delayed to the end of the first quarter, also freeing up space.
Enbridge Inc.’s Lines 4 and 67, transporting heavy oil from Alberta to the U.S., were apportioned by 7 percent this month, the lowest amount since September and down from 18 percent in November, the company said in a Jan. 29 notice to shippers. Apportionment is the amount of extra oil shippers ask to ship beyond a pipeline’s capacity. The level of apportionment can reflect oversupply in the market.
Lines 4 and 67 combined can transport as much as 1.25 million barrels a day to the U.S. from Canada, according to Enbridge’s website.
Exxon Mobil Corp. (XOM:US) said Feb. 1 that the 110,000-barrel-a-day Kearl oil sands project won’t begin production until the end of the first quarter and won’t reach full rates until the end of the year. The extra-heavy oil supply was expected to start in January.
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