US Cash Crude-Coastal grades firm as Iran tensions resurface

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- U.S. coastal cash crude grades firmed on Wednesday, dealers said, on renewed concerns of supply disruptions through the Strait of Hormuz after U.S. President Donald Trump threatened fresh strikes against Iran and said an interim peace deal with the country was "over".

The news pushed the Brent-WTI spread back above the roughly $4-per-barrel threshold that typically boosts the competitiveness of U.S. crude grades in export markets.

Since June 22, the spread had remained below that level amid expectations global crude supply flows would normalize following an interim ceasefire agreement between Washington and Tehran, reducing concerns about potential disruptions to Middle East oil exports.

Capping gains, however, was a U.S. Energy Information Administration report on Wednesday showing commercial crude inventories posted their first weekly increase since mid-April as exports slowed.

Crude inventories rose by 3 million barrels to 411.4 million barrels in the week ending July 3, the EIA said, after falling for 10 straight weeks. The build surprised analysts, who had forecast a 2.4 million-barrel draw.

In refining news, U.S. oil refiners are expected to have about 270,000 barrels per day (bpd) of capacity offline in the week ending July 10, increasing available refining capacity by 125,000 bpd, IIR Energy said on Wednesday. Offline capacity is further expected to decrease to 200,000 bpd the following week, the research company said.

  • Light Louisiana Sweet for August delivery was unchanged at a midpoint of a 50 cent discount and was seen bid and offered between ​a discount of $1.00 and parity to U.S. crude futures CLc1

  • Mars Sour firmed $2 to a midpoint of a $2.50 discount and was seen bid and offered between a $2.70 and $2.30 a barrel discount to U.S. crude futures CLc1

  • WTI Midland firmed 15 cents to a midpoint of a 5 cent premium and was seen bid and offered between a discount of 15 cents and a 25 cents a barrel premium to U.S. crude futures CLc1

  • West Texas Sour eased 10 cents to a midpoint of a $1.95 discount and was seen bid and offered between a $2.70 and $1.20 a barrel discount to U.S. crude futures CLc1

  • WTI at East Houston, also known as MEH, traded between a 15 cent and 55 cent a barrel premium to U.S. crude futures CLc1

  • ICE Brent September futures LCOc1 rose $3.86 to settle at $78.02 a barrel.

  • WTI August crude CLc1 futures rose $3.08 to settle at $73.52 a barrel.

  • The Brent/WTI spread widened 99 cents to last trade at minus $4.81, after hitting a high of minus $3.90 and a low of minus $5.00.