US cash crude differentials were relatively steady on Monday as Gulf of Mexico production restored after Hurricane Zeta, market participants said. Most offshore and coastal crude grades, including East Houston WTI (MEH) and Mars, traded steady from the previous session. Meanwhile, inland grades, including WTI Midland rose 5 cents, trading at a 10-20 cent premium against the benchmark futures.
According to the US Bureau of Safety and Environmental Enforcement (BSEE), roughly 30% of offshore oil production in the US Gulf of Mexico remained offline as of Monday, five days after Zeta’s landfall. Traders said that the demand outlook was weak due to renewed fears about resurging COVID-19 cases. They also expected a build in US crude stocks last week, although distillates inventories are expected to fall.
Light Louisiana Sweet for December delivery was steady between $1.15 and $1.35/barrel premium against US crude futures. Mars Sour was also unchanged, trading at a premium of between 30 cents and 50 cents to US crude futures. WTI Midland inched up 5 cents to a 10-20 cent premium against the benchmark futures. West Texas Sour was steady at between 15 and 25 cents/barrel premium to the benchmark futures. MEH traded at 65 cents/barrel higher than WTI.
