NEW YORK: Differentials for Light Louisiana Sweet held near 2-1/2-year low on Monday as the premium of Brent futures to US oil futures fell below $5 a barrel.
Heavy Louisiana Sweet also dropped, with traders citing the start up of the crude distillation unit at BP's 413,000 barrel per day Whiting, Indiana refinery.
BP announced it had completed commissioning and start up of the new 250,000 barrel per day crude distillation unit on Monday, which traders said should help draw down inventories at the Cushing, Oklahoma oil hub and support WTI prices relative to Brent.
Brent's premium to WTI hit lows of $4.75 a barrel during intraday trade, and was trading just over $5 a barrel in late, post-settlement activity.
Light Louisiana Sweet was heard trading as low as $7.15 a barrel over WTI, with deals confirmed at $7.25 a barrel. The crude was pegged around $7.20 a barrel above the benchmark late in the day, tying levels seen late last week, which were the lowest levels since January 2011.
Heavy Louisiana Sweet $6.75 to $7.00 a barrel above WTI, down from about $7.20 on Friday.
Sweet crudes have also come under pressure from rising flows of Bakken shale oil into the Gulf Coast refining center as the Cushing bottleneck eases.
In addition, Mars crude was heard trading at $1.50 over WTI, about 10 cents under values seen on Friday.
WTI Midland traded at 10 cents and 15 cents under WTI, close to Friday levels. West Texas Sour was also heard at 10 cents over WTI, flat with values from late last week.
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