US Cash Crude-Grades weaken as narrow WTI/Brent spread hurts export demand

Oct 15 (Reuters) - Grades eased on Wednesday for a fourth straight session, dealers said, as the spread between WTI and Brent narrowed to its smallest in more than 10 days, hurting export demand.

WTI Midland and WTI at East Houston, also known as MEH, fell to their lowest since August. Mars also touched its lowest since July.

The spread between WTI and Brent narrowed to as much as minus $4.01. Spreads higher than minus $4 typically shut the arbitrage or the economics of shipping crude oil.

Supertanker freight rates surged this week and are set to stay elevated on U.S.-China tit-for-tat hikes in port fees and concerns about the fallout from U.S. sanctions on a major Chinese crude oil terminal.

Also roiling markets, trading firms have diverted at least five more crude oil tankers from a major port in eastern China after the U.S. imposed sanctions on an import terminal there, according to trading sources and shipping data.

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

Crude stocks rose by 7.36 million barrels in the week ended October 10, the sources said on condition of anonymity. Gasoline inventories rose by 2.99 million barrels, while distillate inventories fell by 4.79 million barrels from last week, the sources said.

U.S. oil refiners are expected to have about 1.3 million barrels per day (bpd) of capacity offline in the week ending October 17, increasing available refining capacity by 517,000 bpd, research company IIR Energy said on Wednesday.

• Light Louisiana Sweet for November delivery eased 15 cents to a midpoint of a $2.15 premium and was seen bid and offered between a $2.00 and $2.30 a barrel premium to U.S. crude futures CLc1 ​

• Mars Sour weakened 25 cents to a midpoint of a $1 discount and was seen bid and offered between a $1.20 and 80-cent a barrel discount to U.S. crude futures CLc1 ​

• WTI Midland eased 5 cents to a midpoint of a 65-cent premium and was seen bid and offered between a 40-cent and 90-cent a barrel premium to U.S. crude futures CLc1 ​

• West Texas Sour eased 5 cents to a midpoint of a 15-cent discount and was seen bid and offered between a discount of 30 cents and parity to U.S. crude futures CLc1

• WTI at East Houston, also known as MEH, traded between a 65-cent and $1.25 a barrel premium to U.S. crude futures CLc1

• ICE Brent December futures LCOc1 fell 48 cents to settle at $61.91 a barrel on Wednesday

• WTI November crude CLc1 futures fell 43 cents to settle at $58.27 a barrel on Wednesday​

• The Brent/WTI spread widened 1 cent to last trade at minus $4.13, after hitting a high of minus $4.01 and a low of minus $4.13