HOUSTON (Reuters) - U.S. crude’s discount to global benchmark Brent on Friday firmed to the narrowest since late August as a pipeline from the Cushing, Oklahoma, storage hub to the U.S. Gulf Coast signaled new capacity coming in February, traders said.
The spread between U.S. crude futures and Brent narrowed to as low as minus $7.50 per barrel, compared with an $8.47 discount on Thursday.
Seaway Crude Pipeline LLC, a joint venture between Enterprise Products Partners LP and Enbridge Inc, on Friday announced a month-long open season on the Seaway crude pipeline system. The move prompted increased demand for barrels at Cushing, traders said.
Expanding the system could add 100,000 barrels per day (bpd) of increased takeaway capacity from Cushing to the Texas Gulf Coast, starting in February, the companies said.
“You’re going to export more barrels and not bring as much in,” one market participant said.
The Seaway system carries crude to a Gulf Coast terminal and connects to other lines linked to oil refineries in Houston and export terminals in Freeport and Texas City, the companies said.
Enterprise in August said it would expand the Seaway pipeline capacity to about 950,000 bpd from 850,000 bpd by adding drag reducing agents to the Seaway 2 line.
Crude inventories at Cushing, the delivery point for U.S. crude futures, rose to almost 43 million barrels on Tuesday, up almost 2 million barrels from the week before, traders said, citing data from market intelligence firm Genscape.
Reporting by Collin Eaton; Editing by Tom Brown