Grades weaken as WTI/Brent discount narrows to most since mid-July
U.S. crude grades marginally weakened on Friday, dealers said, as U.S. crude's discount narrowed to its most since mid-July and recessionary concerns pushed crude futures this week to their lowest levels since February.
Oil traders this week have fretted about inflation, economic growth and demand, but signs of tight supply have kept a floor under prices. Brent crude futures (BBF2023) settled up 80 cents to $94.92 a barrel, 11% off last Friday's settlement. U.S. West Texas Intermediate crude (CLF2024) settled up 47 cents to $89.01, off 8% in the week.
U.S. crude's discount to international benchmark Brent (WTCLc1-LCOc1) hit an intraday high of minus $6.38 a barrel, the narrowest since July 15. However, the spread ended the session wider at minus $6.84.
A narrower discount typically makes U.S. grades less attractive to foreign buyers.
Coastal grades Light Louisiana Sweet (WTC-LLS) and Mars Sour (WTC-MRS) weakened 5 cents to midpoints of $2.85 per barrel and minus $1.40 a barrel, respectively. Mars Sour weakened for the third consecutive session, easing after hitting its strongest level this week since late April.
Inland grade WTI Midland (WTC-WTM) fell 10 cents to a midpoint of $1.60 a barrel. West Texas Sour (WTC-WTS) was unchanged at a midpoint of $1.70.
U.S. energy firms this week cut the number of oil rigs by the most since September.
The number of oil rigs, an early indicator of future output, fell by seven to 598 in the week to Aug. 5, the first weekly decline in 10 weeks, energy services firm Baker Hughes Co (BKR) said in its closely followed report on Friday.
* Light Louisiana Sweet (WTC-LLS) for September delivery fell 5 cents to a midpoint of $2.85 and traded between $2.70 and $3.00 a barrel premium to U.S. crude futures (CLF2024).
* Mars Sour (WTC-MRS) fell 5 cents to a midpoint of minus $1.40 and traded between $1.50 and $1.30 a barrel discount to U.S. crude futures (CLF2024).
* WTI Midland (WTC-WTM) fell 10 cents to a midpoint of $1.60 and traded between $1.40 and $1.80 a barrel premium to U.S. crude futures (CLF2024).
* West Texas Sour (WTC-WTS) was unchanged at a midpoint of $1.70, trading between $1.35 and $2.05 a barrel premium to U.S. crude futures (CLF2024).
* WTI at East Houston, also known as MEH, traded at $2.00 over WTI.
* ICE Brent October (BBF2023) futures rose 80 cents to settle at $94.92 a barrel.
* WTI September crude (CLF2024) futures fell 47 cents to settle at $89.01 a barrel.
* The Brent/WTI spread (WTCLc1-LCOc1) widened 28 cents to settle at minus $6.84, after hitting a high of minus $6.38 and a low of minus $6.90.