After strengthening for two weeks, Light Houston Sweet weakened week over week, dropping 40 cents/b to be assessed at front-month WTI cash plus 85 cents/b on Thursday. The decrease in the LHS differential, representing WTI Midland barrels at Houston terminals, comes even as WTI Midland increased 5 cents/b week on week to an assessment of WTI cash plus 60 cents/b.
The outright assessment of LHS, at $29.32/b on Thursday, hit an all-time low since Platts first began the assessment in August 2013. LHS continues to slowly catch up in assessed value to Light Louisiana Sweet, a comparable grade in the US Gulf Coast region that was assessed at WTI cash plus 95 cents/b on Thursday and which weakened 35 cents/b week on week.
LHS remained at an assessment of $1.25/b through Tuesday before falling 20 cents/b Wednesday and being adjusted downward 20 cents/b Thursday to show direction with the drop in the WTI Midland differential after a day of slow activity.
The weakening of the LHS differential coincided with a build in Gulf Coast crude stocks of 5.206 million barrels week on week to 241.773 million barrels for the week ended January 15, according to the US Energy Information Administration's weekly crude storage report. At the same time, regional crude imports dropped 207,000 b/d week on week to 2.871 million b/d, despite WTI's premium to Brent making imports more economically attractive. WTI flipped into a premium to Brent on Wednesday, with both the front-month NYMEX and ICE Brent futures contracts being assessed lower week on week.
The weakening of LHS also came in the midst of several planned refinery turnarounds taking place and reducing regional demand of other light sweet crudes.
