Latest news with #WTIMidland
Yahoo
06-03-2025
- Business
- Yahoo
Weak refinery, export demand weakens prices for Midland crude along Texas coast
By Arathy Somasekhar HOUSTON (Reuters) - The price spread between WTI Midland crude in West Texas and Houston has narrowed this year as cold weather hurt Permian production, driving up prices, but weaker refinery and export demand on the U.S. Gulf Coast pressured that market lower. The spread between the two pricing points narrowed to 23 cents in March, the lowest since November 2023. That compared to an average of 50 cents a barrel a year ago, when record crude production at the top U.S. Permian oilfield and strong export demand for WTI Midland crude widened price differentials. WTI Midland crude traded at a $1.08 premium to U.S. crude futures in March, easing from a 11-month high of $1.22 in the previous month, data from pricing agency Argus showed. The jump in prices in February came as 1.8 million barrels in the Permian were cut by the recent cold weather that hit operations, according to estimates from analysts at consultancy Energy Aspects. Meanwhile, Permian-quality crude at the Magellan East Houston (MEH) terminal, the main price assessment point along the Gulf Coast, traded at a $1.31 premium to U.S. crude futures. That compared to a $1.47 premium last year. A 10% tariff by the U.S. government on Canadian crude also pressured the spread as Midwest refiners were seeking WTI-Midland crude to Cushing to replace Canadian light sweet oil, said Energy Aspects analyst Jeremy Irwin. Permian to Cushing pipeline flows are tracking 100,000 barrels per day higher year-over-year for the first quarter, Irwin said. Cushing inventories have been near operational lows in recent months, but climbed to about 25.7 million barrels last week, its highest level in four months. Energy Aspects said it has increased its expectations for flows on the BP 1 pipeline, which runs from Cushing to BP Plc's Whiting refinery in Illinois and the Ozark pipeline, which connects Cushing to refineries in Wood River, Illinois, as inland refiners to pull more WTI Midland barrels given tariffs. WEAK DEMAND ALONG THE COAST Four-week average U.S. refinery utilization stood at 85.6% in the week to February 26, data from the U.S. Energy Information Administration showed, as fuel producers undergo maintenance ahead of summer driving season. Net input of crude oil to refiners on average over 4 weeks to the last week was 15.5 million, 4.2% lower than average 2024 levels. Also capping demand was the final shutdown of LyondellBasell Industries' 263,776 barrel-per-day (bpd) Houston refinery this month. U.S. crude export volumes also eased 9,000 bpd to 3.88 million bpd in February, as spring refinery maintenance in Europe cut flows, and as China implemented a 10% retaliatory tariff on U.S. oil. China accounted for about 5% of U.S. crude exports in 2024. America's excess light-sweet supply is struggling to attract international interest, pressuring MEH to soften to attract international buyers, said Irwin. The narrow price differential between WTI Midland and MEH is expected to be temporary, however, Wood Mackenzie analyst Dylan White said, as refinery maintenance season resolves through spring, and on the back of strong Permian production growth and increased use of available pipeline capacity. Sign in to access your portfolio
Reuters
06-03-2025
- Business
- Reuters
Weak refinery, export demand weakens prices for Midland crude along Texas coast
Summary Companies Cold weather impacts about 1.8 mln barrels of Permian output - analyst Midwest refiners seek Midland crude to cut dependency on Canadian light - analyst U.S., Europe refinery maintenances cut demand at the coast Narrow price differential between WTI Midland and MEH expected to be temporary - analysts to be temporary - analysts HOUSTON, March 6 (Reuters) - The price spread between WTI Midland crude in West Texas and Houston has narrowed this year as cold weather hurt Permian production, driving up prices, but weaker refinery and export demand on the U.S. Gulf Coast pressured that market lower. The spread between the two pricing points narrowed to 23 cents in March, the lowest since November 2023. That compared to an average of 50 cents a barrel a year ago, when record crude production at the top U.S. Permian oilfield and strong export demand for WTI Midland crude widened price differentials. WTI Midland crude traded at a $1.08 premium to U.S. crude futures in March, easing from a 11-month high of $1.22 in the previous month, data from pricing agency Argus showed. The jump in prices in February came as 1.8 million barrels in the Permian were cut by the recent cold weather that hit operations, according to estimates from analysts at consultancy Energy Aspects. Meanwhile, Permian-quality crude at the Magellan East Houston (MEH) terminal, the main price assessment point along the Gulf Coast, traded at a $1.31 premium to U.S. crude futures. That compared to a $1.47 premium last year. A 10% tariff by the U.S. government on Canadian crude also pressured the spread as Midwest refiners were seeking WTI-Midland crude to Cushing to replace Canadian light sweet oil, said Energy Aspects analyst Jeremy Irwin. Permian to Cushing pipeline flows are tracking 100,000 barrels per day higher year-over-year for the first quarter, Irwin said. Cushing inventories have been near operational lows in recent months, but climbed to about 25.7 million barrels last week, its highest level in four months. Energy Aspects said it has increased its expectations for flows on the BP 1 pipeline, which runs from Cushing to BP Plc's (BP.L), opens new tab Whiting refinery in Illinois and the Ozark pipeline, which connects Cushing to refineries in Wood River, Illinois, as inland refiners to pull more WTI Midland barrels given tariffs. WEAK DEMAND ALONG THE COAST Four-week average U.S. refinery utilization stood at 85.6% in the week to February 26, data from the U.S. Energy Information Administration showed, as fuel producers undergo maintenance ahead of summer driving season. Net input of crude oil to refiners on average over 4 weeks to the last week was 15.5 million, 4.2% lower than average 2024 levels. Also capping demand was the final shutdown of LyondellBasell Industries' (LYB.N), opens new tab 263,776 barrel-per-day (bpd) Houston refinery this month. U.S. crude export volumes also eased 9,000 bpd to 3.88 million bpd in February, as spring refinery maintenance in Europe cut flows, and as China implemented a 10% retaliatory tariff on U.S. oil. China accounted for about 5% of U.S. crude exports in 2024. America's excess light-sweet supply is struggling to attract international interest, pressuring MEH to soften to attract international buyers, said Irwin. The narrow price differential between WTI Midland and MEH is expected to be temporary, however, Wood Mackenzie analyst Dylan White said, as refinery maintenance season resolves through spring, and on the back of strong Permian production growth and increased use of available pipeline capacity.
Reuters
24-02-2025
- Business
- Reuters
Dated Brent oil benchmark working well, with no changes planned, says Platts
LONDON, Feb 24 (Reuters) - The dated Brent oil market has worked well since U.S. WTI crude was added to the benchmark and further changes are not planned, commodities pricing reporting agency S&P Global Commodity Insights, known as Platts, said on Monday. Last year was the first full calendar year of WTI Midland in the dated Brent benchmark after it became the first crude oil grade from outside the North Sea to be added to the basket in May 2023 because of falling North Sea output. Platts said on Monday that 2024 was smooth sailing for its dated Brent oil benchmark after record trading volumes in the final month of the year. Platts made no announcement to make any further changes to the benchmark at the event. "This year, we don't have a major initiative to share around dated Brent. The past year has really been one of remarkably smooth operations," said Richard Swann, Platts' head of established benchmarks, at the company's event as part of International Energy Week in London. "This is a market functioning well, we believe, with the different component parts seeing a lot of liquidity, and they're all contributing to the overall ecosystem around Brent." Platts said that a record volume of 39.7 million barrels of trade was achieved in December across its North Sea physical crude cargoes, contract for differences and cash BFOE partials. Thomson Reuters competes with Platts in the provision of commodities markets news and data.
