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West Texas Sour Strengthens as Permian Pipelines Prepared

January 17, 2013

West Texas Sour crude strengthened for a second day as Sunoco Logistics Partners LP (SXL:US) and Magellan Midstream Partners LP (MMP:US) prepared to expand pipeline capacity from the Permian Basin to Houston.

WTS’s discount to U.S. benchmark West Texas Intermediate narrowed $3.50 a barrel to $8.50 at 2:09 p.m. New York time, according to data compiled by Bloomberg. It was the smallest margin since Nov. 29. WTI in Midland gained $3 a barrel to $6.50 under WTI in Cushing.

Light Louisiana Sweet, the benchmark low-density, low- sulfur crude on the Gulf Coast, weakened 15 cents to a $16.20-a- barrel premium to WTI at Cushing. Heavy Louisiana Sweet oil’s premium to WTI also shrank 15 cents, to $16.30.

Mars Blend, a medium-gravity, high-sulfur crude from the Gulf of Mexico, was unchanged at a $12.50 premium to WTI. Poseidon’s premium to WTI narrowed by 25 cents to $12.45 a barrel. Thunder Horse’s weakened by 40 cents to $14.40. Southern Green Canyon’s premium widened 15 cents to $12.25.

The differential between WTI and Brent widened by 16 cents to $15.16 a barrel based on March settlement prices .

WTI’s discount to Brent has narrowed from $25.53 on Nov. 15 after Enterprise Product Partners LP (EPD:US) and Enbridge Inc. (ENB) expanded service Jan. 11 on the Seaway pipeline. It spans 500 miles (805 kilometers) from Cushing to Freeport, Texas.

Canadian Crude

Syncrude, a light synthetic oil processed from oil-sands bitumen, weakened for a second day on light volume. It moved to a 65-cent discount from a 15-cent premium to WTI yesterday, according to data provided by Calgary oil broker Net Energy Inc. The discount for Western Canada Select, a heavy bitumen blend, strengthened by 50 cents to $36.50.

February trading in Canadian grades ends tomorrow, a few business days before nominations are due for space on export pipeline shipments to the U.S.

To contact the reporter on this story: Eliot Caroom in New York at

To contact the editor responsible for this story: Dan Stets at

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