US Cash Crude-Grades steady as WTI/Brent spread narrows, domestic stocks fall

Oct 21 (Reuters) - Grades were broadly steady on Tuesday, dealers said, as U.S. crude futures' discount to the international benchmark Brent narrowed to weigh on export demand, offsetting a drop in domestic oil stocks.

West Texas Intermediate crude futures' discount to Brent WTCLc1-LCOc1 narrowed to as little as $3.96 a barrel, suggesting a closing arbitrage window. A discount smaller than around $4 typically disincentivizes export demand.

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

Crude stocks fell by 2.98 million barrels in the week ended October 17, the sources said on condition of anonymity.

Gasoline inventories fell by 236,000 barrels, while distillate inventories fell by 974,000 barrels from a week earlier, the sources said.

The U.S. Department of Energy said on Tuesday it is looking to buy 1 million barrels of crude oil for delivery to the Strategic Petroleum Reserve, as it seeks to take advantage of relatively low oil prices to help replenish the stockpile.

The department typically purchases sour crude such as Mars, which edged higher by 5 cents on Tuesday.

Elsewhere, oil majors including Chevron CVX.N and Shell SHEL.L have reduced oil and gas output at a top Kazakhstan field after a Ukrainian drone strike damaged a gas processing plant in Russia that supports their operations, the companies said on Tuesday.

Light Louisiana Sweet WTC-LLS for November delivery was steady at 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 WTC-MRS rose 5 cents to a midpoint of a $1.30 discount and was seen bid and offered between a $1.40 and $1.20 a barrel discount to U.S. crude futures CLc1

WTI Midland WTC-WTM was steady at a midpoint of a 30-cent premium and was seen bid and offered between a 20-cent and 40-cent a barrel premium to U.S. crude futures CLc1

West Texas Sour WTC-WTS was steady at a midpoint of a 70-cent discount and was seen bid and offered between a 80-cent and 60-cent a barrel discount to U.S. crude futures CLc1

WTI at East Houston WTC-MEH, also known as MEH, traded between a 55-cent and 75-cent a barrel premium to U.S. crude futures CLc1

ICE Brent December futures LCOc1 rose 31 cents to settle at $61.32 a barrel

WTI November crude CLc1 futures rose 30 cents to settle at $57.82 a barrel

The Brent/WTI spread WTCLc1-LCOc1 widened 6 cents to last trade at minus $4.05, after hitting a high of minus $3.96 and a low of minus $4.07