* Crude futures settle higher, Brent out gains U.S. crude * Brent/U.S. crude spread wider, moves back above $9/bbl NEW YORK, May 15 (Reuters) - Cash crude differentials in theUnited States strengthened on Wednesday as the transatlanticspread between Brent and U.S. crude futures widened to more than$9 a barrel. Brent's premium to U.S. crude ended at $9.38 abarrel based on June contract settlements. It ended on Tuesdayat $8.39 after a close at $7.65 on Monday, the lowest the Brentpremium has been at settlement since Jan. 20, 2011, when itended at $6.99. The premium fell to $8.25 and reached $9.53 during Tuesday'ssession. It fell to $7.20 during Tuesday's session, the lowestsince Nov. 17, 2011, when it fell to $5.58 intraday. Usually the wider the arbitrage, the more supportive forU.S. cash crude differentials while a narrower spread oftenpressures differentials. This holds especially for sweet gradesthat are priced in line with other global waterborne crudes suchas Brent. Crude futures reversed earlier losses to settle higher onWednesday. Brent prices rose more than $1 as the June contractneared its expiration slated at the end of Thursday's session. Talks between the U.N. International Atomic Energy Agency(IAEA) and Iran did not result in a deal to allow inspectors toresume an investigation into Iran's disputed nuclear program andthe lack of a breakthrough in the negotiations helped pull crudeprices higher. While crude stocks fell last week in the United States,according to the Energy Information Administration's weeklyreport on Wednesday, the drop was from record high levels andgasoline and diesel stocks rose sharply. The inventory report limited crude price gains. CASH CRUDE VALUES In the U.S. cash crude market on Wednesday, Light LouisianaSweet for June delivery traded from $9.95 to $10.15 perbarrel over the U.S. June crude futures contract, alsoknown by its crude grade of West Texas Intermediate (WTI). WTI is the U.S. light, sweet crude contract's benchmarkgrade deliverable at Cushing, Oklahoma. Those LLS trades had stronger differentials after Tuesday'strades completed from $8.75 to $9.30 above the benchmark. A Gulf of Mexico-produced grade, Mars sour , had Junebarrels traded at $5.00 above the benchmark, stronger afterTuesday's trades at $4.20, $4.25, $4.30 and $4.40 above thebenchmark. Eugene Island crude traded at $7.10 over thebenchmark futures, stronger than offers from sellers pegged onTuesday at $6.95 over the benchmark. MIDLAND GRADES West Texas Intermediate crude at Midland traded at 40and 45 cents over the benchmark futures, stronger afterTuesday's trades at 30 and 35 cents over the benchmark. West Texas Sour crude, also at Midland, traded at 40cents over the benchmark as well, stronger after Tuesday's tradeat 30 cents over. Midland crude grades have had differentials above thebenchmark futures recently on support from expectations for andthen last week's restart of a crude distillation unit at ValeroEnergy Corp's McKee, Texas, refinery. Expectations for another Midwest crude unit restart wereanticipated to provide additional support, traders said. BP Plc's Whiting, Indiana, refinery was to begin oilflows through its 240,000-barrel per day crude unit this week,according to IRR Energy. The BP unit restart will take more oil out of the Cushinghub, helping relieve the glut of crude in the region. 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 SETTLE HIGHER Brent June crude rose $1.08, or 1.05 percent, tosettle at $103.68 a barrel, having traded from $101.20 to$103.82. The Brent June contract expires on Thursday. U.S. June crude rose 9 cents, or 0.10 percent, tosettle at $94.30 a barrel, having traded from $92.13 to $94.44. (Reporting by Robert Gibbons; Editing by David Gregorio)
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