US Cash Crude - Differentials skid as futures soar

HOUSTON, Feb 19 - U.S. cash crude differentials
plunged Thursday as West Texas Intermediate futures soared on
the eve of March contract expiry.
Light Louisiana Sweet <LLS-> shed $1.65 to sell for a
differential of $5.25 a barrel over West Texas Intermediate
<CLc1> after bouncing from +$6.00 to +$7.25 during the day.
Mars sour <MRS-> slid 75 cents to +$3.75 a barrel over West
Texas Intermediate <CLc1>. Less prominent look-alike Poseidon
<PSD-> fell $2.00 to +$3.25.
"It has just been awfully weird," a broker said of volatile
cash crude differential moves Thursday.
On futures markets, March WTI <CLH9> roared $4.86 higher to
$39.48 on U.S. government inventory reports showing a reduction
in crude supplies for the first time in two months. [EIA/S]
The March-April WTI spread <CL-1=R> narrowed $2.09 to -70
cents. A stronger front month against later months on the
futures market usually means weaker cash crude differentials.
The March WTI futures contract expires Friday on the New
York Mercantile Exchange. Cash traders face a
pipeline-scheduling deadline Wednesday, pressure that
contributes to volatility.
Among other cash crudes, there were April deals for LLS
from +$4.70 to +$5.25.
Cash Heavy Louisiana Sweet <HLS-> for March was unchanged
at +$6.75. Southern Green Canyon <SGC-> dealt for $3.00, weaker
by $1.00.