US Cash Crude-Grades dip ahead of the first full day of cash roll
March 21 (Reuters) -Grades weakened on Tuesday, ahead of the cash roll period, dealers said, with sour grades in particular giving up gains made in recent days.
Mars traded flat to U.S. crude futures after rising to a 11-month high of a 75-cent premium on Monday on strong export and refining demand.
WTI Midland and Midland Eat Houston, called MEH, eased 10 cents each to their lowest in more than 2 months as release of sweet oil from the Strategic Petroleum reserve has hurt market demand.
Wednesday will be the first full day of the three-day roll period. Grades typically tend to be more volatile during the period as traders use the window to net out exposures and square positions.
WTI traded at a minus $5.68 discount to Brent, after hitting a high of minus $5.59 and a low $6.00, staying range bound. Exports tend to rise when WTI trades more than $6 below Brent as it makes U.S. linked grades more affordable for foreign buyers.
Rising freight rates may also weigh on exports, analysts said, even though most expect the wide arbitrage to offset some of that impact.
The WTI–Brent spread will need to widen further to reopen the arbitrage for sweet crude to Europe, so the export increase for sweet oil will be led by Asia, Energy Aspects noted.
Meanwhile, U.S. crude oil inventories rose by about 3.3 million barrels last week, according to market sources citing American Petroleum Institute figures. That compared with Reuters estimates for a draw of 1.6 million barrels.
* Light Louisiana Sweet WTC-LLS for April delivery fell 10 cents to a midpoint of a $2.80 premium and was bid and offered between a $2.60 and a $3.00 a barrel premium to U.S. crude futures CLc1.
* Mars Sour WTC-MRS weakened 75 cents to trade flat at its midpoint and was bid and offered between a 20-cent premium and a 20-cent discount a barrel to U.S. crude futures CLc1.
* WTI Midland WTC-WTM eased 10 cents to a midpoint of a $1.10 premium and traded between a 90-cent and a $1.30 a barrel premium to U.S. crude futures CLc1.
* West Texas Sour WTC-WTS eased 55 cents to a midpoint of a 40-cent discount and was traded between a 20-cent and a 60-cent a barrel discount to U.S. crude futures CLc1.
* WTI at East Houston, also known as MEH, traded between $1.20 and $1.50 over WTI.
* ICE Brent May LCOc1 futures rose $1.53 cents to settle at $75.32 a barrel.
* WTI April crude CLc1 futures rose $1.69 to settle at $69.33 a barrel.
* The Brent/WTI spread WTCLc1-LCOc1 narrowed 29 cents to minus $5.68, after hitting a high of minus $5.59 and a low of minus $6.00.
Reporting by Arathy Somasekhar in Houston; Editing by Sandra Maler
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