US Cash Crude-Mars flips to discount for first time in two weeks on quality issues

July 8 (Reuters) - Domestic crude grades broadly rose, with sour grade, Mars bucking the broader upward trend, flipping to a discount for the first time in two weeks due to zinc contamination.

Any challenges to the quality of Mars, a popular offshore grade with U.S. refiners, could further tighten supply along the U.S. Gulf Coast at a time when the lack of heavy Venezuelan barrels have crunched availability.

Meanwhile, U.S. crude stocks rose last week while distillate and gasoline inventories fell, market sources said, citing American Petroleum Institute figures on Tuesday.

Crude stocks rose by 7.13 million barrels in the week ended July 4, the sources said on condition of anonymity. Gasoline inventories fell by 2.18 million barrels and distillate stocks fell by 830,000 barrels, they said.

The U.S. will produce less oil in 2025 than previously expected as declining oil prices have prompted U.S. producers to slow activity this year, the Energy Information Administration forecast on Tuesday in a monthly report.

* Light Louisiana Sweet WTC-LLS for August delivery rose 10 cents to a midpoint of a $2.85 premium and was seen bid and offered between a $2.70 and $3.00 a barrel premium to U.S. crude futures CLc1

* Mars Sour WTC-MRS fell 85 cents to a midpoint of a 10-cent discount and was seen bid and offered between a discount of 20 cents and parity to U.S. crude futures CLc1

* WTI Midland WTC-WTM rose 5 cents to a midpoint of a 55-cent premium and was seen bid and offered between a 45-cent and 65-cent a barrel premium to U.S. crude futures CLc1

* West Texas Sour WTC-WTS rose 10 cents to a midpoint of a 5-cent premium and was seen bid and offered between parity and a 10-cent a barrel premium to U.S. crude futures CLc1

* WTI at East Houston WTC-MEH, also known as MEH, traded between a 65-cent and 85-cent a barrel premium to U.S. crude futures CLc1

* ICE Brent September futures LCOc1 rose 57 cents to settle at $70.15 a barrel

* WTI August crude CLc1 futures rose 40 cents to settle at $68.33 a barrel

* The Brent/WTI spread WTCLc1-LCOc1 widened 6 cents to last trade at minus $3.15, after hitting a high of minus $3.09 and a low of minus $3.16