US Cash Crude-Mars hits 1-year high as Iran war disrupts global supplies
HOUSTON, March 2 (Reuters) - Flagship U.S. offshore crude Mars Sour traded at its highest since December 2024 on Monday, dealers said, as war in Iran threatened global supplies of heavy, sour grades.
Mars Sour jumped $1.50 compared with Friday's close, to trade at a premium of $3 to U.S. crude futures on Monday.
Israeli and U.S. strikes on Iran and retaliation by Tehran forced shutdowns of oil and gas facilities across the region and disrupted shipping in the crucial Strait of Hormuz.
On a typical day, ships carrying crude oil equal to about one-fifth of global demand sail through the Strait of Hormuz along with tankers hauling diesel, gasoline and other fuels to major Asian markets including China and India. The waterway is also the conduit for about 20% of the world’s liquefied natural gas.
JPMorgan said a three- to four-week squeeze on Strait of Hormuz traffic could force Gulf producers to shut output and push Brent above $100.
Other offshore grades also made gains as the spread between U.S. crude futures and Brent widened to a discount of as much as minus $8.15 a barrel, its widest since November 2022.
A discount larger than $4 a barrel typically drives higher demand for barrels across the Atlantic, as traders spot an arbitrage window.
Light Louisiana Sweet for April delivery rose $1.25 a midpoint of a $4.25 premium and was seen bid and offered between a $4.15 and $4.35 a barrel premium to U.S. crude futures CLc1
Mars Sour rose $1.50 at a midpoint of a $3 premium and was seen bid and offered between a $2.90 and $3.1 a barrel premium to U.S. crude futures CLc1
WTI Midland rose 20 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 rose 85 cents to a midpoint of a $1.95 discount and was seen bid and offered between a $2.05 and $1.85 a barrel discount to U.S. crude futures CLc1
WTI at East Houston , also known as MEH, traded between a $1.05 and $1.25 a barrel premium to U.S. crude futures CLc1
ICE Brent May futures LCOc1 rose $4.87 to settle at $77.74 a barrel
WTI April crude CLc1 futures rose $4.21 to settle at $71.23 a barrel
The Brent/WTI spread widened $1.24 to last trade at minus $7.22, after hitting a high of minus $6.42 and a low of minus $8.15
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