New York: Light Louisiana Sweet (LLS) crude oil weakened against benchmark West Texas Intermediate (WTI) on Wednesday amid a 13 per cent rally over the past two days in the marker crude.
WTI increased with New York futures, which touched a five-week high on speculation that China will broaden efforts to boost economic growth, bolstering fuel demand in the world's third-largest economy.
LLS's premium to WTI weakened by $1.10 (Dh4.04) to $4 a barrel, as the oil rose $2.63, or 5.6 per cent, to $49.38 a barrel, according to data compiled by Bloomberg.
WTI for April delivery at Cushing, Oklahoma, increased $3.73, or nine per cent, to $45.38 a barrel, at parity with New York Mercantile Exchange futures.
Moves in WTI have driven domestic and foreign crude oil differentials in recent months as supplies at Cushing, Oklahoma, the delivery point for New York futures, have risen 89 per cent since November 7.
Cushing inventories fell for a third consecutive week in the week ended February 27 after six straight gains, according to an Energy Department report Wednesday. Stockpiles are more than double year-ago levels.
US supplies fell 757,000 barrels, or 0.2 per cent, to 350.6 million barrels last week, the Energy Department said. Inventories were forecast to rise 1 million barrels, according to the median of analyst estimates in a Bloomberg News survey.
Oil stocks in states along the Gulf of Mexico fell 3.25 million barrels, or 1.9 per cent, to 179.6 million barrels, the biggest drop since the week ended December 19.
Heavy Louisiana Sweet's premium to WTI shrank by 75 cents to $3.75 a barrel, as the grade added $2.98, or 6.5 per cent, to $49.13 a barrel.
Mars Blend crude oil's premium to WTI narrowed by 70 cents to $2.10 a barrel. The grade added $3.03, or 6.8 per cent, to $47.48.
Poseidon oil's premium to WTI narrowed by 55 cents to $2.30 a barrel, as the grade rose $3.18, or 7.2 per cent, to $47.68 a barrel.
- $2.63 increase in Light Louisiana Sweet crude
- $3.73 increase in West Texas Intermediate for April
- 0.2% decline in US supplies last week