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Most U.S. cash crude differentials weaker as arbitrage narrows

Mon, 10th Jun 2013 21:45

* Crude futures settle lower, weak China data pressures * Brent/U.S. crude spread narrows after seesawing NEW YORK, June 10 (Reuters) - Most cash crude differentialsin the United States weakened on Monday as oil futures eased andthe trans-Atlantic spread between Brent and U.S. crude futuresnarrowed, traders and brokers said. Crude futures settled lower in lackluster trading as datapointing to slower economic growth and weaker oil demand inChina weighed on oil prices and offset any bullish effectstemming from concerns about geopolitical risks to supply. Brent's premium to U.S. crude ended at $8.18 abarrel based on July contract settlements, after ending at $8.53on Friday. The spread traded from $7.95 to $8.74 on Monday. It was aswide as $9.24 on Friday. The spread has narrowed after reaching$10.01 intraday last Wednesday. 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 global waterborne crudessuch as Brent. CASH CRUDE TRADES Light Louisiana sweet for July delivery traded from$9.00 to $9.40 over the U.S. July crude futures, alsoknown as West Texas Intermediate (WTI), which is the U.S. light,sweet crude contract's benchmark grade deliverable at theCushing, Oklahoma, hub. Most of those trades were completed at weaker differentialsafter Friday's trades at $9.25 and $9.60 over the benchmark. August barrels of LLS traded on Monday at $8.30 and $8.40over the benchmark, weaker after Friday's trade completed at$8.60 over. Mars sour , a Gulf of Mexico-produced grade, traded at$3.90, $4.10 and $4.20 over the benchmark futures, weaker afterFriday's trade seen at $4.50 over the benchmark. Mars barrels for August traded at $3.25 over and Septemberbarrels traded at $2.80 over the benchmark. Eugene Island crude traded at $6.20, $6.25 and $6.30over the benchmark, weaker after Friday's trade at $6.90 overthe benchmark. Bakken crude at the Clearbrook, Minnesota, hub hadbids pegged at $2.00 under and offers from buyers at $4.75 overthe benchmark futures, after the grade traded on Friday at $1.25under the benchmark. Offers from Bakken sellers strengthened on news on Mondaythat a coker at Syncrude Canada Ltd's northern Alberta oil sandsproject will be shut for maintenance for the next 50 days. MIDLAND GRADES West Texas Intermediate crude at Midland traded at 5cents under the futures benchmark, strengthening slightly aftertrading on Friday at 10 cents under the futures benchmark. West Texas Sour crude, also at Midland, traded atflat to the benchmark. The trade put the differential betweenFriday's bids seen at 10 cents under and offers pegged at 10cents over the benchmark. Midland grades were supported by Sunday's news that ExxonMobil Corp's 238,600-barrel per day (bpd) Joliet,Illinois, refinery was returning to normal operations after atwo-month overhaul. The Joliet return and BP Plc's announced intention to startup an upgraded crude distillation unit at its Whiting, Indiana,refinery by the end of June have raised expectations that morecrude oil that might be sent into storage at the Cushing,Oklahoma, hub will be needed by refiners. CRUDE FUTURES Brent July crude fell 61 cents, or 0.58 percent, tosettle at $103.95 a barrel, having traded from $103.66 to$104.76. U.S. July crude fell 26 cents, or 0.27 percent, tosettle at $95.77 a barrel, having traded from $95.19 to $96.25. (Reporting by Robert Gibbons; editing by Andrew Hay)

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