Mars firm on strong demand from Asian buyers
U.S. Mars crude oil strengthened on Tuesday, amid strong demand for the sour grade from Asian buyers, dealers said.
Mars Sour (WTC-MRS) rose about $1 to a midpoint of a $2.15 per barrel discount to U.S. crude futures ().
A sale from U.S. oil reserves, which is mainly blended sour crude, was expected to depress the value of U.S. sour crude Mars and benefit buyers in Asia which processes mainly high-sulphur oil.
However, benchmark oil prices took a plunge late last week, fuelled by worries about the Omicron variant of the coronavirus, and impacting arbitrage to move crude and causing uncertainty in the markets.
U.S. crude futures fell by more than 5% on Tuesday, after Moderna's chief cast doubt on the efficacy of COVID-19 vaccines against the Omicron coronavirus variant, spooking financial markets and heightening worries about oil demand.
However, oil prices will stay elevated into next year as OPEC+ keeps a tight leash on supply despite U.S.-led strategic crude releases, a Reuters poll showed on Tuesday.
The U.S. emergency oil reserve is a tool available to Washington to address unusual short-term mismatches between oil supply and demand as the Biden administration looks to move to less volatile energy sources, U.S. Energy Secretary Jennifer Granholm told Reuters on Tuesday.
U.S. crude oil production fell 3.5% in September after Hurricane Ida temporarily halted most crude production in federal waters of the Gulf of Mexico, according to a monthly report from the U.S. Energy Information Administration on Tuesday.
U.S. crude oil stockpiles fell a smaller-than-expected 747,000 barrels for the week ended Nov. 26, according to market sources citing American Petroleum Institute figures. A Reuters poll had forecast a 1.2 million barrel draw.
WTI's six-month backwardation fell to about $1.90 per barrel, its lowest since September. (CLc1-CLc7)
* Light Louisiana Sweet (WTC-LLS) for January delivery rose 15 cents to a midpoint of a $1.25 premium and was bid and offered between a $1 and a $1.50 a barrel premium to U.S. crude futures ().
* Mars Sour (WTC-MRS) rose $1 to a midpoint of a $2.15 discount and traded between a $1.80 and a $2.50 a barrel discount to U.S. crude futures ().
* WTI Midland (WTC-WTM) was unchanged at a midpoint of a 70-cent premium, and traded between a 50 cents and a 90 cents a barrel premium to U.S. crude futures ().
* West Texas Sour (WTC-WTS) fell 15 cents to a midpoint of a $1.30 discount and traded between a $1.50 and a $1.10 a barrel discount to U.S. crude futures ().
* WTI at East Houston, also known as MEH, traded between $1 and $1.40 over WTI.
* ICE Brent January () futures fell $2.87 to settle at $70.57 a barrel.
* WTI January crude () futures fell $3.77 to settle at $66.18 a barrel.
* The Brent/WTI spread (WTCLc1-LCOc1) narrowed 90 cents to settle at minus $4.39, after hitting a high of minus $3.10 and a low of minus $3.36.