US Cash Crude-Grades ease on hopes US-Iran talks will keep Hormuz shipping flowing

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- Grades largely eased on Friday, dealers said, as the end of tit-for-tat air strikes and the promise of renewed talks between the U.S. and Iran next week raised hopes that shipping would resume through the Strait of Hormuz, while a report showed that U.S. drillers did not add any oil rigs last week.

Qatari negotiators are in Iran to meet Iranian officials in an effort to de-escalate tensions and create conditions for broader negotiations to continue, a source with knowledge of the situation told Reuters on Friday, adding that the talks were being conducted in coordination with the United States.

But risks remain, and an escalation of hostilities between the U.S. and Iran could upend the International Energy Agency's forecast of a significant oil market surplus next year, it said on Friday.

U.S. oil refiners, however, have increased refining capacity by 125,000 barrels per day, with only 270,000 bpd of capacity expected to be offline for the week ending July 10, research company IIR Energy estimated on Friday.

Drawdowns of barrels from the U.S. strategic reserves over the past few weeks have kept the market well supplied.

Separately, a closely watched report from Baker Hughes on Friday said the United States kept steady its oil rig count at 445 in the week to July 10. Oil and gas rig counts are an early indicator of future output.

  • Light Louisiana Sweet for August delivery eased 10 cents to a midpoint of a 10-cent discount and was seen bid and offered between​ discount of 20 cents and parity to U.S. crude futures CLc1

  • Mars Sour eased $1.50 to a midpoint of a $3.50 discount and was seen bid and offered between a $3.70 and $3.30 a barrel discount to U.S. crude futures CLc1

  • WTI Midland dropped 5 cents to a midpoint of a 15-cent discount and was seen bid and offered between a discount of 35 cents​​ and 5 cents a barrel premium to U.S. crude futures CLc1

  • West Texas Sour eased 5 cents to a midpoint of a $2.40 discount and was seen bid and offered between a $2.70 and $2.10 a barrel discount to U.S. crude futures CLc1

  • WTI at East Houston, also known as MEH, traded between a discount of 10 cents​​ and 30 cents a barrel premium to U.S. crude futures CLc1

  • ICE Brent September futures LCOc1 settled at $76.01 a barrel, down 29 cents​.

  • WTI August crude CLc1 futures settled at $71.41 a barrel, down 67 cents​.

  • The Brent/WTI spread widened 15 cents to last trade at minus $4.55, after hitting a high of minus $4.29 and a low of minus $4.71.