US Cash Crude-Coastal grades ease as market adjusts to Trump tariffs

March 5 (Reuters) - U.S. coastal grades eased on Wednesday, dealers said, as market participants backed down from some panic-induced buying after the U.S.-imposed tariffs on Mexico and Canada.

Mars Sour WTC-MRS, which had surged during the previous session to as high as a $3.60 per barrel premium to U.S. crude futures CLc1, eased 40 cents on Wednesday at a midpoint of a $2.35 premium.

The key U.S. sour crude grade, which is an attractive alternative to grades such as Isthmus, a sour crude produced in Mexico, was one of the early indications on Tuesday that U.S. President Donald Trump's tariffs had begun to disrupt oil trade.

Trump's tariffs - a 10% tariff on Canadian oil and a 25% tariff on imports from Mexico - took effect overnight on Tuesday and were expected to force buyers to seek alternative supplies of heavier Canadian or Mexican crude, or pay higher prices.

Another coastal grade, Light Louisiana Sweet WTC-LLS also eased 30 cents at a midpoint of a $4.15 premium, though dealers did not see it trade either Tuesday or Wednesday.

On Wednesday, inland grades WTI Midland WTC-WTM and West Texas Sour WTC-WTS firmed marginally.

U.S. government data on Wednesday showed crude inventories rose by 3.6 million barrels to 433.8 million barrels in the week to February 28, the EIA said, compared with analysts' expectations in a Reuters poll for a 341,000-barrel rise.

U.S. crude futures CLc1 touched $65.22, the lowest since May 2023, while Brent crude futures LCOc1 sank to $68.33, its lowest since December 2021.

In refinery news, Phillips 66's PSX.N 258,500 barrel-per-day Bayway refinery is undergoing a major turnaround, research company IIR Energy said on Wednesday.

Light Louisiana Sweet WTC-LLS for April delivery eased 30 cents at a midpoint of a $4.15 premium and was seen bid and offered between a $3.80 and $4.50 a barrel premium to U.S. crude futures CLc1

Mars Sour WTC-MRS eased 40 cents at a midpoint of a $2.35 premium and was seen bid and offered between a $2.25 and $2.45 a barrel premium to U.S. crude futures CLc1

WTI Midland WTC-WTM firmed 10 cents at a midpoint of a $1.15 premium and was seen bid and offered between a $1.05 and $1.25 a barrel premium to U.S. crude futures CLc1

West Texas Sour WTC-WTS firmed 5 cents at a midpoint of an 80-cent premium and was seen bid and offered between a 65-cent and 95-cent a barrel premium to U.S. crude futures CLc1

WTI at East Houston WTC-MEH, also known as MEH, traded between a $1.30 and $1.50 a barrel premium to U.S. crude futures CLc1

ICE Brent May futures LCOc1 fell $1.74 to settle at $69.30 a barrel

WTI April crude CLc1 futures fell $1.95 to settle at $66.31 a barrel

The Brent/WTI spread WTCLc1-LCOc1 narrowed to last trade at minus $3.41, after hitting a high of minus $3.38 and a low of minus $3.53.