* Crude futures settle higher after choppy trade * Brent/U.S. crude spread narrows to less than $8/bbl NEW YORK, May 20 (Reuters) - Cash crude differentials in theUnited States were mostly weaker on Monday as the transatlanticspread between Brent and U.S. crude futures seesawed and thennarrowed, traders and brokers said. Brent's premium to U.S. crude ended at $7.87 abarrel based on July contract settlements, after ending at $8.35on Friday. The spread traded from $7.74 to $8.80 during Monday'ssession. Front-month Brent's premium to its corresponding U.S. crudecontract ended at $7.65 a week ago, the lowest the Brent premiumhas been at settlement since Jan. 20, 2011, when it ended at$6.99. Usually the wider the arbitrage, the more supportive forU.S. cash crude differentials while a narrower spread oftenpressures differentials. This holds especially for sweet gradesthat are priced in line with other global waterborne crudes suchas Brent. CASH CRUDE TRADES In the U.S. cash crude market, Light Louisiana Sweet for June delivery traded at $9.80, $10.50, $10.65, $10.70 and$10.80 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 weaker Friday's trades completed at$10.80, $10.85 and $10.90 over the benchmark. Heavy Louisiana sweet crude traded at $9.70 over thebenchmark, where bids were pegged on Friday, when seller'soffers were pegged at $10.10 over the benchmark. A Gulf of Mexico-produced grade, Mars sour , had Junebarrels traded at $4.50 and $4.90 above the benchmark futures,after trading on Friday at $4.70, $4.80 and $5.00 above thebenchmark. July barrels of Mars traded at $4.25, $4.45 and $4.80 overthe benchmark futures, either side of Friday's trade completedat $4.50 over the benchmark. Eugene Island crude traded at $7.20 above thebenchmark futures, only slightly weaker than Friday's trade seencompleted at $7.25 over the benchmark. Bonito sour crude traded at $7.30 above the benchmark,after the bid/offer spread on Friday was pegged at $6.70/$7.40over. MIDLAND GRADES West Texas Intermediate crude at Midland traded at 15and 20 cents over the benchmark futures, after trading on Fridayat 25 and 30 cents over. West Texas Sour crude, also at Midland, traded at 20cents over the benchmark. On Friday, buyers' bids were seen at25 cents over with sellers' offers pegged at 30 cents over. Thursday's WTS trades were completed at 25 and 30 cents overthe benchmark. Midland crude grades have had differentials above thebenchmark futures recently on support from expectations for, andthen last week's restart of a crude distillation unit at ValeroEnergy Corp's McKee, Texas, refinery. Also supporting Midland differentials in recent weeks wereincreases in pipeline capacity from the West Texas region to theU.S. Gulf Coast refineries, traders said. CRUDE FUTURES SETTLE HIGHER Brent July crude rose 16 cents, or 0.15 percent, tosettle at $104.80 a barrel, having traded from $103.83 to$105.31. Expiring Brent June crude settled and went off theboard on last Thursday at $103.80 a barrel. On Monday, U.S. June crude rose 69 cents, or 0.72percent, to settle at $96.71 a barrel, having traded from $95.23to $97.11. The U.S. June contract expires on Tuesday. U.S. July crude rose 64 cents to settle at $96.93 a barrel. (Reporting by Robert Gibbons, editing by G Crosse)