* Crude futures end higher, U.S. gains most * Brent-U.S. crude spread narrows to less than $1/bbl NEW YORK, July 18 (Reuters) - Most U.S. cash crudedifferentials weakened on Thursday as the transatlantic spreadnarrowed sharply and trading for August barrels began to taperoff, traders and brokers said. Ranges for differentials were wide as U.S. crude oil futurespushed higher, hitting their highest level in 16 months, whileBrent's premium to U.S. crude fell, shrinking the spreadintraday to its narrowest since August 2010. Brent crude's premium to U.S. crude ended at 89cents a barrel based on September contract settlements, afterending on Wednesday at $2.26. The spread ranged from 51 cents to $2.52 on Thursday. 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. SWEET CRUDE GRADES Light Louisiana sweet crude oil for August deliverytraded from $5.85 to $6.50 over the benchmark U.S. crude futures, weakening during the day. Those differentials were weaker after Wednesday's tradesfrom $6.40 to $6.60 over the benchmark. Sweet crude, especially LLS, has been supported because of alack of foreign sweet on the U.S. Gulf Coast and recent highcapacity use by refiners, according to brokers and analysts. Heavy Louisiana sweet traded at $5.00 and $5.10 overthe benchmark, weaker after Wednesday's trades at $5.40 and$5.50 over the benchmark. Bakken crude at the Clearbrook, Minnesota, hub tradedat $3.00 under the futures benchmark, a third consecutive day itwas seen trading at that level. SOUR CRUDE GRADES Sour grades were mixed as Bonito and Eugene Island remainedsupported after Royal Dutch/Shell shut production atits Auger platform in the Gulf of Mexico. The Auger platform feeds the Bonito sour crude stream,according to the Shell web site. Bonito sour crude traded at $5.75 over the futuresbenchmark, after offers on Wednesday were seen at $5.50 over. Eugene Island crude traded at $5 over Mar sour,putting it near Wednesday's trade at $5.25 over the benchmarkfutures. Eugene Island has strengthened after it traded at only $2.70over on Monday. Mars sour crude, another Gulf of Mexico-producedgrade, traded from 10 cents under to 50 cents over the futuresbenchmark. Mars traded on Wednesday from 30 cents under to 15 centsover the benchmark, stronger after Tuesday's trades at 60 to 85cents under the futures benchmark. CRUDE FUTURES Brent September crude rose only 9 cents to settle at$108.70 a barrel. The Brent August crude contract on Tuesdayexpired and went off the board at $109.40 a barrel. U.S. August crude rose $1.56 to settle at $108.04 abarrel. The U.S. August contract expires on July 22. U.S. September crude rose $1.46, or 1.37 percent, tosettle at $107.81 a barrel. (Reporting by Robert Gibbons; Editing by Carol Bishopric)
