US Gulf Coast sour crude benchmark Mars has had a dramatic summer — with its differential first spiking to a four-year high in June and then dropping nearly $9/b to its lowest level of the year. Mars, as well as other US Gulf Coast sweets and sour grades, have followed the same trajectory in recent weeks. Mars reached its highest level since 2014 on June 7, when it was assessed at a $5.80/b premium to the underlying WTI crude contract. But as quickly as it shot up, Mars has fallen sharply. August barrels were heard trading Monday morning at a $3.70/b discount to WTI, which was $1.15/b lower than where S&P Global Plats assessed it on Friday. While August Mars has sunk, September and October barrels are seen recovering. The August/September box for Mars was heard around -$1.80/b and October barrels have traded at slight premium to WTI. “It’s nice to buy on prompt pricing and sell September,” one trader said. “[It’s] easy money.” “Smart refiners will pick some up here,” another trader said about the August differential for Mars. Some crude traders said narrowing spreads between WTI and Brent and WTI and Dubai are putting downward pressure on US… continue reading
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Source: CTRM Center