* Crude futures end higher as U.S. inventories drop * Brent-U.S. crude spread narrows * Shell to shut production platform, supports sour grades NEW YORK, July 17 (Reuters) - Cash crude differentials inthe United States strengthened on Wednesday as news that Shellwould temporarily shut production from a Gulf of Mexico platformsupported sour grades. Sweet grades strengthened because recent surges in gasolineprices and prices for ethanol credits have prompted refinerinterest in the higher yielding sweets, traders and brokerssaid. AUGER PLATFORM TO SHUT Royal Dutch/Shell is shutting down production atits Auger platform in the Gulf of Mexico while it hooks up itsnew Cardamom oilfield, the company said on Wednesday. The Auger platform feeds the Bonito sour crude stream,according to the Shell web site, and traders and brokers saidthe news explained the stronger differentials for Bonito onTuesday, when August barrels traded at $4.45 and $4.60 a barrelover the benchmark U.S. crude futures. Offers from sellers were pegged at $5.50 over the benchmarkfutures on Wednesday. Eugene Island crude , another sour grade, alsostrengthened, trading on Wednesday at $5.25 over the benchmarkfutures, after sellers' offers were pegged at $4.25 over thebenchmark on Tuesday. It traded at $2.70 over on Monday. Mars sour crude, another Gulf of Mexico-producedgrade, traded from 30 cents under to 15 cents over the futuresbenchmark, stronger after Tuesday's trades at 60 to 85 centsunder the futures benchmark. Trades for September barrels were completed at 75 and 80cents under the futures benchmark, stronger after tradingTuesday at 90 cents and $1.10 below the benchmark. SWEETS Light Louisiana sweet crude oil for August deliverytraded from $6.40 to $6.60 over the futures benchmark, strongerafter trading on Tuesday at $5.95 over. Trade for September LLS barrels were completed at $5.05 and$5.10 over the futures benchmark, stronger after trading onTuesday at $4.80 over the benchmark. Heavy Louisiana sweet traded at $5.40 and $5.50 overthe benchmark, just under the $5.65 over offers seen on Tuesday,but much stronger than bids from buyers seen at $4.70 over. Bakken crude at the Clearbrook, Minnesota, hub tradedat $3.00 under the futures benchmark, steady to Tuesday. "LLS is strong because there's no foreign sweet on the U.S.Gulf Coast and (refinery) runs are very high and the arbitrageis firmly shut to move any foreign in," said a broker. Another broker noted the better gasoline yields from sweetcrude, especially of fuels needed for export. Exports of refinedproducts have increased, according to traders and brokers,because of the surge in prices for ethanol credits needed tosell fuel domestically. Prices for ethanol fuel credits, known as RINs, extendedtheir gains to fresh all-time highs on Wednesday. Crude futures rose on Wednesday as data from the EnergyInformation Administration showing U.S. oil inventories fellsharply last, while refinery capacity utilization edged higherto 92.8 percent. Brent crude's premium to U.S. crude ended at$2.26 a barrel based on September contract settlements, afterending on Tuesday at $2.45. Brent's August contract expired on Tuesday and the spreadended at $3.40 a barrel based on August contract settlements. Usually, the wider the arbitrage, the more supportive it isfor U.S. cash crude differentials, while a narrower spread oftenpressures differentials. This especially holds true for sweetgrades, which are priced in line with global waterborne crudessuch as Brent. CRUDE FUTURES Brent September crude rose 47 cents to settle at$108.61 a barrel. The expiring Brent August crude contract onTuesday expired and went off the board at $109.40 a barrel. U.S. August crude rose 48 cents to settle at $106.48a barrel. The U.S. August contract expires on July 22. (Reporting by Robert Gibbons; Editing by David Gregorio)