Los Angeles, Aug 20: Differentials for US west coast waterborne crude oil narrowed Thursday to their tightest level since March 1997 after a major oil company confirmed they sold Alaskan crude.The cargo was sold to a small Los Angeles-area refinery for $0.8450 cents a barrel under West Texas Intermediate/Cushing (WTI).
At least one major Northwest refinery still needed to buy Alaska crude for September, traders said.
The ANS "diff" has narrowed over $2.00 a barrel the last four months. Steadily narrowing against WTI, ANS prices have risen on a combination of lower production and fewer foreign alternatives. OPEC production cuts and strong demand in Canada have kept those grades from California refiners.
Meanwhile, Alaska's July production slipped seven per cent from year-ago levels, the American Petroleum Institute (API) reported Wednesday.
Alaska output fell to 1.151 million barrels per day in July, down from 1.238 million a year ago, but up slightly versus last month, the API said.
Overall, production for ANS declines in summer as warm temperatures inhibit pumping and seasonal maintenance slows output.
The tighter discount and higher WTI price, which rose to nearly 50 cents to $13.58/13.65, gave ANS a lift. Pure ANS prices rose to $12.69/12.85 a barrel, up nearly 50 cents.
In foreign crude, few Canadian barrels were available to northwest refiners. Barrels were priced at postings, traders said.
Traders said sellers requested more pipeline space on Line 63, California's main crude oil artery. The high demand for space was apparent in September prorationing on Line 63, which was set by Arco at 79.59 per cent on Thursday.
Two majors confirmed a deal on Line 63 crude at a premium $1.40 a barrel over Buena Vista California crude last week, traders said. Line 63 traded $12.19/12.36 on a fixed basis, firming with higher WTI and ANS prices.
SJV heavy was priced between $8.13 and $8.23 on an outright basis, with premiums holding around five cents a barrel over.
Wilmington grade premiums were idle at 55 to 65 cents over postings, with pure prices $9.33/9.43 cents.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.