HOUSTON, Dec 7 (Reuters) - U.S. cash crude differentials strengthened Tuesday as front-month West Texas Intermediate weakened in spreads and cold weather goosed heating oil futures.
Light Louisiana Sweet traded at $5 a barrel over WTI, up 20 cents from late Monday levels and rebounding from late November lows to near three-month highs.
Mars sour sold for 10 cents under the screen, up 25 cents and strongest since September.
For other cash crude deals, see.
The WTI-Brent spread boomeranged out to $2.70 from about $2.20 earlier in the day. The January-February WTI spread widened 17 cents against WTI to minus 53 cents.
Both spread moves tend to support grades because Brent competes with Gulf Coast cash crudes when the arb is not closed and second-month WTI delivers at the same time as cash crude.
Cold weather is supporting strong heating oil futures, which encourages refiners to buy domestic grades so they can take advantage of improved feedstock-to-product margins.
January heating oil Tuesday hit $2.5161 a barrel, highest since Oct. 7, 2008, before settling at $2.4702, down half a cent.
The heating oil crack spread grew 38 cents to $14.98 a barrel, Reuters data showed. Gasoline cracks fell but hovered between $8.50 and $9, a respectable level.
Imports of Canadian crude have been reduced by flow limitations on Enbridge Inc pipelines, so Midwestern refiners are competing more for U.S. domestic grades.
In the background are year-end property tax considerations, which cause Texas refiners to use domestic grades rather than imports so they can keep taxes on inventories low.
On futures markets, January WTI shed 69 cents to $88.69 a barrel while January Brent ended 6 cents lower at $91.39. February WTI dropped 52 cents to $89.22.
------------------------------------------------------ See for Reuters' generic refining margins
See for the WTI front/second month spread
See for front month WTI/Brent futures spread
See for Reuters' assessment of Dated Brent
See for Reuters assessed tanker rates
See for assessed domestic crude differentials
See for outright U.S. cash crude prices
See for a list of U.S. refinery outages
See for U.S. EIA inventory reports and forecasts
See for recent cash crude deals
(Reporting by Janet McGurty and Bruce Nichols; Editing by Lisa Shumaker)
((Email: b.nichols@thomsonreuters.com; +1 713 210 8510; Reuters Messaging: bruce.nichols.reuters.com@reuters.net)) Keywords: MARKETS USCRUDE (For help: Click 'Contact Us' in your desk top, click here or call 1-800-738-8377 for Reuters Products and 1-888-463-3383 for Thomson products; For client training: training.americas@thomsonreuters.com ; +1 646-223-5546) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
Light Louisiana Sweet traded at $5 a barrel over WTI, up 20 cents from late Monday levels and rebounding from late November lows to near three-month highs.
Mars sour sold for 10 cents under the screen, up 25 cents and strongest since September.
For other cash crude deals, see.
The WTI-Brent spread boomeranged out to $2.70 from about $2.20 earlier in the day. The January-February WTI spread widened 17 cents against WTI to minus 53 cents.
Both spread moves tend to support grades because Brent competes with Gulf Coast cash crudes when the arb is not closed and second-month WTI delivers at the same time as cash crude.
Cold weather is supporting strong heating oil futures, which encourages refiners to buy domestic grades so they can take advantage of improved feedstock-to-product margins.
January heating oil Tuesday hit $2.5161 a barrel, highest since Oct. 7, 2008, before settling at $2.4702, down half a cent.
The heating oil crack spread grew 38 cents to $14.98 a barrel, Reuters data showed. Gasoline cracks fell but hovered between $8.50 and $9, a respectable level.
Imports of Canadian crude have been reduced by flow limitations on Enbridge Inc pipelines, so Midwestern refiners are competing more for U.S. domestic grades.
In the background are year-end property tax considerations, which cause Texas refiners to use domestic grades rather than imports so they can keep taxes on inventories low.
On futures markets, January WTI shed 69 cents to $88.69 a barrel while January Brent ended 6 cents lower at $91.39. February WTI dropped 52 cents to $89.22.
------------------------------------------------------ See for Reuters' generic refining margins
See for the WTI front/second month spread
See for front month WTI/Brent futures spread
See for Reuters' assessment of Dated Brent
See for Reuters assessed tanker rates
See for assessed domestic crude differentials
See for outright U.S. cash crude prices
See for a list of U.S. refinery outages
See for U.S. EIA inventory reports and forecasts
See for recent cash crude deals
(Reporting by Janet McGurty and Bruce Nichols; Editing by Lisa Shumaker)
((Email: b.nichols@thomsonreuters.com; +1 713 210 8510; Reuters Messaging: bruce.nichols.reuters.com@reuters.net)) Keywords: MARKETS USCRUDE (For help: Click 'Contact Us' in your desk top, click here or call 1-800-738-8377 for Reuters Products and 1-888-463-3383 for Thomson products; For client training: training.americas@thomsonreuters.com ; +1 646-223-5546) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.