* Crude futures settle lower * Brent/U.S. crude spread narrows slightly NEW YORK, May 13 (Reuters) - Cash crude differentials in theUnited States were mostly weaker on Monday as the transatlanticspread between Brent and U.S. crude futures seesawed beforenarrowing slightly. Crude futures fell, pressured by data showing slower oildemand growth in China and weak U.S. retail gasoline sales. Astronger dollar also helped pressure dollar-denominatedoil prices, traders and brokers said. In the U.S. cash crude market on Monday, Light LouisianaSweet for June delivery traded at $8.75 and $8.80 perbarrel over the U.S. June crude futures contract, alsoknown by its crude grade of West Texas Intermediate (WTI). WTI is the U.S. light, sweet crude contract's benchmarkgrade deliverable at Cushing, Oklahoma. Those LLS trades were completed at differentials weaker thanFriday's trades at from $9.10 to $9.40 above the benchmark. July barrels of LLS traded on Monday at $8.25 over thebenchmark futures. Heavy Louisiana sweet traded on Monday at $8.40 overthe benchmark for June barrels, weaker after trading on Fridayat $8.75 over the benchmark. A Gulf of Mexico-produced grade, Mars sour , had Junebarrels traded at $4.30, $4.40 and $4.45 above the benchmarkfutures, within Friday's range of trades completed at $4.00 and$4.50 above the benchmark. Eugene Island traded at $6.60 over the benchmarkfutures, slightly weaker after trading on Friday at $6.70 over. MIDLAND GRADES West Texas Intermediate crude at Midland traded at 20and 25 cents over the benchmark futures, after its bid/offerspread on Friday was pegged at 10/20 cents over the benchmark. The differential has weakened from a week ago, when tradeswere completed in a much stronger range from 35 to 65 centsover. West Texas Sour crude, also at Midland, traded at 20cents over the benchmark, stronger after trading on Friday at 15cents over the benchmark. WTS traded as strong as 60 cents over last Monday. Midland crude grades have been supported recently byexpectations for and then last week's restart of a crudedistillation unit at Valero Energy Corp's McKee, Texas,refinery. Valero said on Monday that all production units were back inoperation and at or near planned rates. Expectations that another Midwest crude unit restart isnearing were anticipated to provide additional support, traderssaid. BP Plc's Whiting, Indiana, refinery should begin oilflows through its 240,000-barrel per day crude unit early thisweek, according to IRR Energy. The BP unit restart will take more oil out of the Cushinghub, helping relieve the glut of crude in the region. Also supporting Midland differentials in recent weeks wereincreases in pipeline capacity from the West Texas region to theU.S. Gulf Coast's refineries, traders said. BRENT/WTI SPREAD Brent's premium to U.S. crude ended at $7.65 abarrel based on June contract settlements, after ending at $7.87on Friday. Monday was the lowest the Brent premium has been atsettlement since Jan. 20, 2011, when it ended at $6.99. The premium fell to $7.32 during Monday's session, thelowest since Dec. 28, 2011, when it fell to $7.31 intraday. Thepremium reached $8.09 intraday. Usually the wider the arbitrage, the more supportive forU.S. cash crude differentials while a narrower spread oftenpressures differentials. This holds especially true for sweetgrades that are priced in line with other global waterbornecrudes such as Brent. Cash crude prices did not react to news that MarathonPetroleum Corp was repairing a Wood River-to-Patoka,Illinois, crude oil pipeline after the shut pipe leaked duringhydrostatic testing . CRUDE FUTURES FALL Brent June crude fell $1.09, or 1.05 percent, tosettle at $102.82 a barrel, having traded from $102.25 to$103.86. The Brent June contract expires on Thursday. U.S. June crude fell 87 cents, or 0.91 percent, tosettle at $95.17 a barrel, having traded from $94.47 to $95.81. (Reporting by Robert Gibbons; Editing by Marguerita Choy)
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