Generic Hero BannerGeneric Hero Banner
Latest market news

Mars crude premium swings down by $10/bl

  • : Crude oil
  • 26/03/10

US crude values tumbled on Tuesday after President Donald Trump suggested the conflict in Iran could end soon, signaling a potential end to Middle East supply disruptions.

The Nymex WTI futures contract dropped by over 10pc on Tuesday to around $85/bl, reflecting the value of Domestic Sweet (DSW) crude in Cushing, Oklahoma.

Crude differentials for US pipeline grades also tumbled, with medium sour Mars trading at least $10/bl weaker relative to DSW than Monday's high. Medium sours are falling from multi-year highs after eight straight daily gains. These grades are particularly affected by the war in Iran because most US imports of crude from the region are of similar quality to US Gulf sours. They also have higher distillate yields than lighter grades, making them more valuable with the Middle East also being a large exporter of jet fuel and diesel.

Louisiana-delivered Mars has traded so far Tuesday as low as a $3.25/bl premium to the Cushing basis after trading as high as a $13.50/bl premium on Monday.

In Texas, Southern Green Canyon (SGC) has been heard trading as low as parity to DSW so far Tuesday, down from the prior session's $7.07/bl volume-weighted average premium.

Light sweet premiums to the benchmark also fell. Permian-quality WTI at the Magellan East Houston (MEH) terminal was discussed at a prompt $1.25-1.35/bl premium bid-ask spread to the Cushing benchmark at midday Tuesday, according to the Argus Crude Market Ticker (ACMT), down from last session's $1.95/bl volume-weighted average premium.

WTI at Midland was discussed at a prompt bid-ask spread of 35-45¢/bl above the Cushing benchmark at midday Tuesday, according to the ACMT. The value is lower than Monday's $1.07/bl volume-weighted average premium.

WTI futures fell earlier Tuesday as the market weighed comments by US president Donald Trump late on Monday that suggested potential relief to supply disruptions caused by the war in the Middle East.

The April Nymex light sweet crude futures contract fell by $9.69/bl, or 10pc, to $85.08/bl. The May light sweet discount to May Ice Brent narrowed by $1.33/bl, to $6.15/bl, at 12:34 ET.


Generic Hero Banner

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more