The Light Houston Sweet crude market saw a late-week decline in value relative to cash WTI, which market sources attributed to a number of factors including a disappearing contango structure in the Brent-WTI spread.
The sweet crude grade ended the week at a 95 cents/b premium to November cash WTI, down 15 cents/b from Thursday and 25 cents/b less than one week ago. It is also the weakest premium for LHS over cash WTI since July 19, when it was at 90 cents/b over cash WTI, S&P Global Platts data showed.
"It's the usual cash period mess," a Houston crude trader said, referring to the period of time between when front-month NYMEX WTI expires and the cash market rolls a little less than one week later.
A second trader said the Gulf Coast market was a "bloodbath" Friday and added grades were "completely collapsing."
"The market is flooded with everything coming out of tanks," a crude trader said Friday. "That will help push crude down."
The front-month Platts WTI-Brent Houston swap ended the week at minus $1.71/b, compared with minus $1.63/b for month 12 -- a difference of about 8 cents/b contango. That compares with a front-month to month-12 spread of 3 cents/b backward one week ago, Platts data showed.
