Coastal grades of crude oil fell while inland crudes rose on Friday, dealers said, as the U.S. crude futures’ discount to the international benchmark Brent narrowed, weighing on export demand.

West Texas Intermediate crude futures’ discount to Brent (WTCLc1-LCOc1) narrowed to as little as $3.83 a barrel, suggesting a closing arbitrage window. A discount smaller than around $4 typically disincentivizes export demand.

Meanwhile, U.S. oil refiners are expected to have had about 318,000 barrels per day (bpd) of capacity offline in the week ending August 29, increasing available refining capacity by 135,000 bpd, research company IIR Energy said.

Offline capacity is expected to increase to 408,000 bpd in the week ending September 5 and 498,000 bpd in the subsequent week, IIR added.

On the supply side, U.S. energy firms this week cut the number of oil and natural gas rigs operating for a second week in a row, energy services firm Baker Hughes said in its closely followed report on Friday.

Baker Hughes said oil rigs rose by one to 412 this week, while gas rigs fell by three to 119.

Light Louisiana Sweet (WTC-LLS) for October delivery fell 17 cents to a midpoint of a $1.98 premium and was seen bid and offered between a $1.75 and $2.20 a barrel premium to U.S. crude futures

Mars Sour (WTC-MRS) fell 5 cents to a midpoint of a 10-cent premium and was seen bid and offered between parity and 20-cent a barrel premium to U.S. crude futures WTI Midland (WTC-WTM) rose 5 cents to a midpoint of a 95-cent premium and was seen bid and offered between a 85-cent and $1.05 a barrel premium to U.S. crude futures

West Texas Sour (WTC-WTS) rose 10 cents to a midpoint of a 15-cent premium and was seen bid and offered between a 5-cent and 25-cent a barrel premium to U.S. crude futures WTI at East Houston (WTC-MEH), also known as MEH, traded between a $1.20 and $1.40 a barrel premium to U.S. crude futures ICE Brent October futures fell 50 cents to settle at $68.12 a barrel WTI October crude futures fell 59 cents to settle at $64.01 a barrel

The Brent/WTI spread (WTCLc1-LCOc1) narrowed 19 cents to last trade at minus $3.83, after hitting a high of minus $3.83 and a low of minus $3.96
Source: Reuters