HOUSTON, Jan 5 (Reuters) - U.S. cash crude differentials climbed further Wednesday as spreads continued to support grade buying.
'But I am getting the feeling that grades are getting close to their peak,' said one Gulf Coast broker. 'Any day, a spread move sends grades in the opposite direction.'
Cash crude differential moves during the day supported the expectation of flattening.
Mars sour sold 60 cents stronger at $2.20 a barrel over West Texas Intermediate but later in the day sold for $2.10 over.
Light Louisiana Sweet strengthened 45 cents to deal at $7.10 over but some traders said it tailed off to $7.00 or $7.05 over in the afternoon.
'It's a smaller audience in the afternoon. The ratable buyers were done for the day,' a broker said, explaining the end-of-the-day slowdown.
Nothing in spreads - which support grades when front-month WTI weakens - suggested a slowdown.
The WTI-Brent spread reached minus $5.20 at settlement, more than a dollar deeper against WTI than on Tuesday. The February-March WTI spread hit minus $1.30 from minus $1.04.
Futures markets, which had been solidly down early Wednesday moved up after positive jobs data pulled up many markets, including stocks and other commodities.
Crude markets also rose on the largest five-week drawdown since mid-2008. Government data showed crude stocks fell 4.15 million barrels.
But spreads were muddied by the fact that oil in storage at the Cushing, Oklahoma, delivery point rose 400,000 barrels.
'We have all the crude we need in the United States,' a trader said. 'That's not the case for the rest of the world, apparently.'
February light, sweet crude on the New York Mercantile Exchange settled up 92 cents at $90.30 a barrel. February Brent closed up $1.97 at $95.50.
The heating oil crack was up 56 cents at $16.45 late Wednesday. The generic gasoline crack was up 36 cents to $12.37, Reuters data showed.
Although there were wide regional variations, both crack spreads were strong enough to support refiner purchases of crude oil to make gasoline, diesel and other products.
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See for Reuters assessed tanker rates
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See for a list of U.S. refinery outages
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(Reporting by Bruce Nichols and Janet McGurty; Editing by David Gregorio) ((Email: b.nichols@thomsonreuters.com; +1 713 210 8510; Reuters Messaging:bruce.nichols.reuters.com@reuters.net)) Keywords: MARKETS USCRUDE 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 2011. 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.
'But I am getting the feeling that grades are getting close to their peak,' said one Gulf Coast broker. 'Any day, a spread move sends grades in the opposite direction.'
Cash crude differential moves during the day supported the expectation of flattening.
Mars sour sold 60 cents stronger at $2.20 a barrel over West Texas Intermediate but later in the day sold for $2.10 over.
Light Louisiana Sweet strengthened 45 cents to deal at $7.10 over but some traders said it tailed off to $7.00 or $7.05 over in the afternoon.
'It's a smaller audience in the afternoon. The ratable buyers were done for the day,' a broker said, explaining the end-of-the-day slowdown.
Nothing in spreads - which support grades when front-month WTI weakens - suggested a slowdown.
The WTI-Brent spread reached minus $5.20 at settlement, more than a dollar deeper against WTI than on Tuesday. The February-March WTI spread hit minus $1.30 from minus $1.04.
Futures markets, which had been solidly down early Wednesday moved up after positive jobs data pulled up many markets, including stocks and other commodities.
Crude markets also rose on the largest five-week drawdown since mid-2008. Government data showed crude stocks fell 4.15 million barrels.
But spreads were muddied by the fact that oil in storage at the Cushing, Oklahoma, delivery point rose 400,000 barrels.
'We have all the crude we need in the United States,' a trader said. 'That's not the case for the rest of the world, apparently.'
February light, sweet crude on the New York Mercantile Exchange settled up 92 cents at $90.30 a barrel. February Brent closed up $1.97 at $95.50.
The heating oil crack was up 56 cents at $16.45 late Wednesday. The generic gasoline crack was up 36 cents to $12.37, Reuters data showed.
Although there were wide regional variations, both crack spreads were strong enough to support refiner purchases of crude oil to make gasoline, diesel and other products.
See for recent cash crude deals
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
(Reporting by Bruce Nichols and Janet McGurty; Editing by David Gregorio) ((Email: b.nichols@thomsonreuters.com; +1 713 210 8510; Reuters Messaging:bruce.nichols.reuters.com@reuters.net)) Keywords: MARKETS USCRUDE 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 2011. 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.