A cargo of Alaska North Slope (ANS) for September delivery was sold to a California refiner
at a discount of $2.75 a barrel to September West Texas Intermediate
(WTI) crude. The deal marked a further widening of the ANS discount against WTI since a low for the year was set on July 3 with two deals at discounts of $1.59 and $1.61. In January of this year the discount stood at levels of over $5.
On Wednesday of this week two deals were struck for September delivery of ANS to Hawaii
at the same price of $2.25 a barrel below ANS on a delivered basis.
Traders had said this equated to a price of about $2.75/$3.00 per barrel below WTI for delivery to California or Washington state, because of the higher cost of shipping to Hawaii.
Crude values have been weakening on the U.S. West Coast recently because of high levels of crude oil and refined products inventories and deteriorating refining margins.
Data from the American Petroleum Institute (API) shows that refinery utilization in the PADD 5 region of the western United States slipped to 92.3 percent last week from 95 percent. PADD 5 crude oil inventories rose by some 400,000 barrels to 55.6 million barrels last week and were some 2.2 million barrels higher than at the same time last year. - (Reuters)