US Medium Sour Crude Prices Weaken Amid Slowing Exports

US Oil Exports Slowdown Weighs on Key Crude Grade Prices

Prices for Mars crude, a key US medium sour crude grade, have weakened in recent weeks, underscoring a slowdown in American oil exports. According to the latest pricing data from Link Data Services, Mars crude has declined in five of the last seven trading sessions, losing 75% of its value on Wednesday alone, before gaining slightly on Thursday.

The medium sour grade, produced in the Gulf of Mexico, often trades in tandem with the pace of US exports. Prices had been surging as the world turned to American shipments to replace Middle Eastern supplies disrupted by the Iran war. However, in recent weeks, US exports have cooled from record levels. The premium Mars crude commands over benchmark West Texas Intermediate has shrunk to around $1.50 a barrel, down from a high of $18 reached in early April.

US crude exports fell to 4.4 million barrels a day last week, a 1.2 million barrel decline from the previous week, according to Energy Information Administration data released Thursday. This represents a significant slowdown from the record volume of over 6.4 million barrels a day exported in April.

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Dwindling US inventories and surging demand from domestic refineries are limiting the amount of spare crude that can be sent overseas. Meanwhile, there are also signs of slowing oil demand in China, which had previously been a key driver of demand for Mars and other medium sour grades.

Declining inventories at the key Cushing, Oklahoma, storage hub may also be weighing on Gulf Coast grades. EIA data showed Cushing inventories fell to 23 million barrels last week, approaching levels often viewed by traders as near tank bottoms. When Cushing inventories tighten, inland refiners typically compete more aggressively for barrels tied to the hub, often pressuring Gulf Coast crude prices.