HOUSTON - Gains in cash crudes due to economic factors early in the week are expected to be limited by continuing lower demand from refiners, who are still contending with reduced demand and seeing a weak outlook for the coming year.
The discount for Mars sour MRS- narrowed early in the day to between $4.00 and $3.75 per barrel under West Texas Intermediate CLc1.
Light Louisiana Sweet LLS- continued above WTI, talked at premiums between 55 cents and 80 cents per barrel.
WTI for November delivery climbed more than $1.90 per barrel past $73.67 amid widespread speculation traders would test the $75-level.
Last week, Sunoco Inc announced it would shut indefinitely its Eagle Point, New Jersey, refinery as soon as the plant runs out of its on-hand crude inventory in about four to six weeks.
Sunoco joined Valero Energy Corp and Flying J in shutting refineries due to the economic downturn.
Valero also said last week that it would consider any options for its 16 refineries, including further shutdowns, and possible sales.
Wall Street analysts pointed to the Sunoco shutdown as most likely one of many steps refiners will take to cut production as refining margins run thin because motor fuel demand continues squashed by the recession. (Reporting by Erwin Seba; Editing by John Picinich)