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U.S. Cash Crude-Gulf Coast grades pare gains on refinery outages

Thu, 16th Jan 2014 22:03

NEW YORK, Jan 16 (Reuters) - U.S. Gulf Coast cash crudegrades pared gains on Thursday reversing this week's rally asrefinery outages and planned maintenance work outweighed supplyissues, traders said.

Light Louisiana Sweet differentials first reached anew nine-month high at $13.50 a barrel over benchmarkfront-month U.S. crude oil futures but later fell to$10.75 over futures, ending the day $1.25 lower than Wednesdaylevels.

Mars Sour differentials ended $1.00 lower at $8.00 abarrel over benchmark futures, after trading as high as $10.25 abarrel over futures earlier in the day.

Differentials jumped on Wednesday after reports from theU.S. Energy Information Administration showed regional crudestocks were at one-year low as imports fell to their lowestlevel since September 2008.

Repairs on Royal Dutch Shell's Ship Shoal pipelinewere partly behind the recent rally in Gulf Coast grades, a fewtraders said.

The 390,000 barrels-per-day system, located southwest of NewOrleans, includes a 22-inch (56 cm) sour pipeline and a 16-inch(40 cm) sweet crude pipeline to Gibson Terminal in Louisiana anda 20-inch (51 cm) batched pipeline to another terminal in St.James, Louisiana, according to Shell's website.

But refiners are expected to take nearly 1.6 million barrelsper day of capacity offline for planned spring maintenance work,according to estimates, which will likely curb demand for oil inthe coming weeks.

On Thursday, Marathon Petroleum Corp said it shut ahydrocracker at its 522,000 bpd refinery in Garyville, Louisianafor planned maintenance work.

Chevron Corp's also shut a hydrocracker at its330,000 bpd Pascagoula, Mississippi, refinery, according toenergy intelligence firm Genscape.

Elsewhere, Bakken crude differentials were littlechanged, bid at $2.30 a barrel under U.S. oil futures andoffered at $1.90 under, even as Enbridge Inc reportedtwo pipelines in its North Dakota system were shut due to apower outage.

Enbridge said Lines 81 and 82 on the 475,000 barrels-per-daysystem were shut after high winds knocked out power at its Minotpumping station.

In the futures market, U.S. crude oil ended 21 cents lowerat $93.96 a barrel while international Brent expired 4cents lower at $107.09 a barrel.

Brent's premium to U.S. crude ended at $13.13 abarrel. It had narrowed to $12.35 a barrel earlier, its smallestspread in two weeks.

(Reporting by Selam Gebrekidan; Editing by Meredith Mazzilli)

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