BP Share News (BP.)

* Brent futures dip, U.S. crude pushes higher * Brent/U.S. crude spread narrows, ends below $8/bbl NEW YORK, May 8 (Reuters) - Cash crude differentials in theUnited States weakened on Wednesday as the transatlantic spreadbetween Brent and U.S. crude futures narrowed to under $8 abarrel. Brent's premium to U.S. crude ended at $7.72 abarrel on Wednesday based on June contract settlements, lowerafter ending at $8.78 on Tuesday. Wednesday's spread was the narrowest at settlement sinceJan. 20, 2011, when it ended at $6.99. The spread was as wide as $8.79 and narrowed to $7.58 onWednesday, the smallest spread since Dec. 28, 2011, when it fellto $7.31 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. Crude oil inventories at Cushing, Oklahoma, the deliverypoint for the U.S. light sweet crude contract fell by 652,000barrels to 49.15 million last week, U.S. Energy InformationAdministration (EIA) data released on Wednesday showed. There is an expectation that increased capacity to movesupply from the U.S. Midwest and out of the Cushing hub reducesBrent's premium to the U.S. contract. CASH CRUDE TRADES In the U.S. cash crude market, Light Louisiana Sweet for June delivery traded from $9.05 to $10.00 over the U.S. Junecrude futures contract, also known by its benchmark crudegrade West Texas Intermediate (WTI). WTI is the U.S. light, sweet crude contract's benchmarkgrade deliverable at Cushing, Oklahoma. Those LLS differentials were weaker after Tuesday's tradesfrom $10.45 to $11.80 above the benchmark. July LLS barrels traded on Wednesday at $9.10 over thebenchmark. A Gulf of Mexico-produced grade, Mars sour , had Junebarrels traded from $4.70 to $5.40 above the benchmark futures,weaker than Tuesday's trades from $6.15 to $6.70 above thebenchmark. Mars July barrels traded on Wednesday at $4.75 over thebenchmark, weaker than Tuesday's trades completed at $5.75,$5.80 and $6.00 over. August barrels traded on Wednesday at $3.60 over thebenchmark futures, with the July and August differentialssuggesting traders expect the Brent/WTI spread to narrow goingforward. Eugene Island traded at $7.00 over the benchmark,weaker after Tuesday's trade completed at $8.75 over. MIDLAND GRADES West Texas Intermediate crude at Midland traded at 25cents over the benchmark futures, weaker after trading onTuesday at 40 and 45 cents over. Trades were completed on Monday in a range from 35 to 65cents over. West Texas Sour crude, also at Midland, traded at 30cents over the benchmark, weaker after Tuesday's trade at 40cents over and after trading on Monday at 60 cents over. Midland crude grades were recently supported by theimpending restart of a 156,000-barrel per day crude distillationunit at Valero Energy Corp's McKee, Texas, refineryafter a turnaround, according to traders and brokers. Valero said on Monday the unit had restarted and was atplanned production levels. 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. CRUDE FUTURES MIXED Brent June crude fell 6 cents, or 0.06 percent, tosettle at $104.34 a barrel. U.S. June crude rose $1, or1.05 percent, to settle at $96.62 a barrel. (Reporting by Robert Gibbons; Editing by Peter Galloway)