US Cash Crude - Grades weaken on low fuel demand

NEW YORK, Sept 16 (Reuters) - U.S. cash crude grades weakened against futures on Wednesday, led by sour grades, as bearish demand figures for U.S. petroleum products meant cash crude was in less demand.

Bonito sour fell as much as 85 cents a barrel to trade for $2.40 a barrel below West Texas Intermediate. Mars sour fell up to 60 cents to trade for $4.65 below WTI, and Poseidon sour fell 35 cents to trade for $4.65 a barrel below WTI.

U.S. Energy Information Administration data released Wednesday showed that U.S. gasoline supplies increased 500,000 barrels to 207.7 million barrels as demand fell last week, which included the Sept 5-7 Labor Day holiday weekend, a period which usually features higher demand.

'It's apparent that U.S. consumers are still sitting on the sidelines ...' said Addison Armstrong, Director of Market Research at Tradition Energy.

Meanwhile, U.S. inventories of distillate fuels, which include heating oil and diesel, were up 2.2 million barrels at 167.8 million barrels last week, EIA added.

In futures markets, U.S. crude for October delivery rose $1.48 a barrel to $72.41, after EIA reported a drop in U.S. crude stocks last week. The spread between October barrels and those for November delivery was unchanged from Tuesday, at 37 cents a barrel. The spread between November WTI and Brent crude futures was 62 cents a barrel in favor of WTI.

When WTI trades at a premium to Brent, as it did Wednesday, U.S. cash grades may weaken because they are thrust into competition against imported barrels, priced against the Brent marker.

Light Louisiana Sweet traded for 45 cents above West Texas Intermediate, even from Tuesday. Thunder Horse grade traded for -$2.40 a barrel, down 30 cents. WTI at Midland was down 2 cents to trade for 35 cents a barrel below WTI.

Alaska North Slope crude oil for November delivery sold Wednesday for 90 cents a barrel under WTI, unchanged, traders said.

California buyers, following WTI front-month futures, raised posted prices by $1.60 a barrel. --------------------------------------------------------------



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(Reporting by Joshua Schneyer; Editing by Christian Wiessner)

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