U.S. Cash Crude-Coastal grades firm as WTI/Brent spread steadies

Big Sky Industrial

07/07/2021 21:46

July 7 (Reuters) - U.S. coastal crude grades strengthened on
Wednesday as the discount for U.S. crude futures to Brent was
steady, dealers said.
    Coastal grades such as Mars crude and Louisiana Light Sweet
(LLS) strengthened while WTI at East Houston was steady. 
    The discount of U.S. crude oil futures to Brent futures
 WTCLc1-LCOc1  remained under $2 and was near its tightest in
months. The September WTI/Brent spread narrowed by just 2 cents
on Wednesday. 
    On Monday, OPEC producers canceled a meeting when major
players were unable to come to an agreement to increase supply.
Initially, oil rallied to multi-year highs on news of the
breakdown in talks, but prices retreated as traders focused on
the possibility that the strife will cause some national
producers to open the taps and start exporting more barrels.
 O/R  
    Still, U.S. shale producers promised investors they would
keep a tight rein on spending in 2021, and the restraint on
drilling has extended to their hedging strategies even as crude
prices surged due to disarray among OPEC and allied producing
countries.  urn:newsml:reuters.com:*:nL2N2OJ155 
    U.S. crude oil production is expected to fall by 210,000
barrels per day (bpd) in 2021 to 11.10 million bpd, the U.S.
Energy Information Administration (EIA) said on Wednesday, a
smaller decline than its previous forecast for a drop of 230,000
bpd. U.S. output is expected to average 11.85 million bpd, up
from a forecast average of 11.10 million bpd in 2021.
 urn:newsml:reuters.com:*:nL2N2OJ1S9
    Meanwhile, U.S. crude stocks fell by about 8 million barrels
for the week ended July 2, according to two market sources,
citing American Petroleum Institute figures on Tuesday.  API/S 
        
    * Light Louisiana Sweet  WTC-LLS  for August delivery rose 5
cents to a midpoint of 75 cents a barrel premium and traded
between 50 cents and $1 a barrel premium to U.S. crude futures
 CLc1 .        
    * Mars Sour  WTC-MRS  rose 30 cents to a midpoint of $1.75 a
barrel discount and traded between $2 and $1.50 a barrel
discount to U.S. crude futures  CLc1 .        
    * WTI Midland  WTC-WTM  fell 15 cents to a midpoint of
parity to futures and traded between a 10-cent discount and a
10-cents a barrel premium to U.S. crude futures  CLc1 .        
    * West Texas Sour  WTC-WTS  rose 10 cents to a midpoint of
parity to futures and traded between a 10-cent discount and a
10-cents a barrel premium to U.S. crude futures  CLc1 .        
    * WTI at East Houston, also known as MEH, traded at a
midpoint of 40 cents over WTI.     
    * ICE Brent September  LCOc1  futures fell $1.10 to settle
at $73.43 a barrel.
    * WTI August crude  CLc1  futures fell $1.17 to settle at
$72.20 a barrel.
    * The September Brent/WTI spread  WTCLc1-LCOc1  narrowed to
settle at minus $1.93 from about minus $1.95 on Tuesday. 

 (Reporting by Devika Krishna Kumar in New York
Editing by Sonya Hepinstall)
 ((devika.kumar@thomsonreuters.com; +1 646 223 6059; Reuters
Messaging: devika.kumar.thomsonreuters.com@reuters.net))