US Cash Crude-Grades rise on supply concerns, strong US refinery demand

By Reuters News

HOUSTON, Oct 22 (Reuters) - Grades broadly rose on Thursday, dealers said, on supply concerns and strong US refinery demand on the second full day of the roll trading period.

The volatile roll-trade period is used by traders to square positions, adjust slates and net out any exposure. Prices to roll positions from November to December traded at $6.55 a barrel.

Saudi Aramco told staff to evacuate its headquarters in Dhahran on the Gulf near Bahrain, Reuters reported, as fighting between the world's largest crude exporter and Yemen's Houthis intensified.

Clashes between the Houthis and a Saudi-led coalition that backs Yemen's internationally recognized government have raged since the Iran-aligned group pushed towards Bab el-Mandeb, a shipping ​chokepoint at the Red Sea's mouth.

US refiners have maintained higher-than-normal run rates this year, buoyed by strong margins stemming from tight global supplies of refined fuel products, the US Energy Information Administration said on Thursday.

Refinery utilization has averaged more than 95% of capacity between May and September, the highest for those months since 1998, the EIA said.

Citi said on Thursday that near-term risks to oil prices remain skewed to the upside despite a recovery in Gulf crude exports, as shipping bottlenecks continue to keep delivered supplies tight. "The normalization of Arab Gulf oil exports has been volumetric rather than logistical, with unprecedented shipping inefficiencies keeping delivered crude costs elevated," Citi said.

Meanwhile, US President Donald Trump on Thursday determined petroleum production, refining, and related activities are essential to national defense.

Trump also invoked the Cold War-era Defense Production Act allowing him to provide financial incentives for those oil related activities and for pipelines and energy storage.

  • Light Louisiana Sweet for November delivery fell $1.10 to a midpoint of a $6.90 premium and was seen bid and offered between a $6.80 and $7.00 a barrel premium to U.S. crude futures ​

  • Mars Sour rose $4 to a midpoint of a $10 premium and was seen bid and offered between a $9.90 and $10.1 a barrel premium to U.S. crude futures ​

  • WTI Midland rose $1.10 to a midpoint of a 80-cent premium and was seen bid and offered between a 70-cent and 90-cent a barrel premium to U.S. crude futures ​

  • West Texas Sour rose 50 cents to a midpoint of a $2.80 discount and was seen bid and offered between a $2.90 and $2.70 a barrel discount to U.S. crude futures ​

  • WTI at East Houston , also known as MEH, traded between a $1.20 and $1.40 a barrel premium to U.S. crude futures ​

  • ICE Brent December futures rose $4.35 to settle at $113.17 a barrel on Thursday​.

  • WTI December crude futures rose $2.32 to settle at $99.47 a barrel on Thursday​.

  • The Brent/WTI spread widened $2.13 to to last trade at minus $13.80, after hitting a high of minus $11.92 and a low of minus $14.00.

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