Coastal grades ease as pipelines stop and start

U.S. Gulf Coast crude oil grades mostly weakened on Friday as the Zydeco pipeline started up, while the Keystone line remained shut after a leak this week, dealers said.

Light Louisiana Sweet crude for January delivery eased 15 cents to a midpoint of $1 a barrel premium to U.S. crude futures, while Magellan at East Houston crude weakened 35 cents to a midpoint of a 25-cent premium.

TC Energy's TRP Keystone pipeline, which ferries about 600,000 barrels of Canadian crude per day (bpd) to the United States, remained shut since late on Wednesday after a breach spewed more than 14,000 barrels of oil into a Kansas creek.

If the outage lasts for more than 10 days, it could push the Cushing, Oklahoma, storage to near the operational minimum of 20 million barrels, researchers said.

In other pipeline news, Shell Pipeline Co.'s Zydeco oil pipeline from Houston to Port Neches, Texas, has been returned to normal operations, the company said, after the segment ran at reduced capacity.

The company in November said that the segment was running at reduced capacity due to project work at Port Neches. It added that it was expected to remain at reduced capacity until mid to late December.

In a sign of future supply, the number of rigs drilling for gas in the United States fell by 2 to 153 in the week to Dec. 9, while oil-directed drilling rigs fell by 2 to 625, data from oil services firm Baker Hughes showed.

Meanwhile, money managers cut their net long U.S. crude futures and options positions in the week to Dec. 6, the U.S. Commodity Futures Trading Commission (CFTC) said, by 5,429 contracts to 161,455 during the period.

* Light Louisiana Sweet (WTC-LLS) for January delivery fell 15 cents to a midpoint of $1 and traded between an 80-cent and $1.20 a barrel premium to U.S. crude futures CL1!.

* Mars Sour (WTC-MRS) rose 5 cents to a midpoint of minus $5.70 and traded between a $5.80 and $5.60 a barrel discount to U.S. crude futures CL1!.

* WTI Midland (WTC-WTM) fell 25 cents to a midpoint of parity and traded between a 20-cent discount and 20-cent a barrel premium to U.S. crude futures CL1!.

* West Texas Sour (WTC-WTS) rose 63 cents to a midpoint of minus $1.50 and traded between a $1.75 and $1.25 a barrel discount to U.S. crude futures CL1!.

* WTI at East Houston, also known as MEH, traded from parity to 50 cents over WTI.

* ICE Brent February BRN1! futures fell 5 cents to settle at $76.10 a barrel.

* WTI January crude CL1! futures fell 44 cents to settle at $71.02 a barrel.

* The Brent/WTI spread (WTCLc1-LCOc1) widened 32 cents to settle at minus $4.89, after hitting a high of minus $4.24 and a low of minus $4.98.