US cash crude – Grades surge in wild second roll day
HOUSTON, May 24, 2010 (Reuters) – U.S. cash crude differentials soared Monday as the second day of June-July roll trade saw the roll deepen, giving strong support to physical crudes.
Roll – the three days between expiry of a monthly futures contract and the pipeline-scheduling deadline – can be volatile anyway because buyers are under pressure to complete slates. But Monday’s volatility was epic. Mars sour strengthened $3.45 to sell for $5.00 a barrel over West Texas Intermediate. Light Louisiana Sweet gained $1.90 to sell for $8.40 over the screen.
Heavy Louisiana Sweet jumped $1.50 to sell for $8.00 over.
The roll deepened to minus $4.00 from minus $2.00 Friday, meaning June WTI was worth $4.00 less than July WTI in post-expiry trade, a spread move that tends to support cash crudes.
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On futures markets, July WTI gained 17 cents to $70.21 a barrel. July Brent slid 51 cents to $71.17.
Alaska North Slope crude for July delivery sold for a 50-cent discount to a calendar month average price for July WTI in the last publicly disclosed sale Thursday.
Buyers of California crudes raised posted prices 15 cents a barrel.