U.S. Cash Crude-Gulf Coast grades pare gains on refinery outages

NEW YORK (Frankfurt: HX6.F - news) , Jan 16 (Reuters) - U.S. Gulf Coast cash crude grades pared gains on Thursday reversing this week's rally as refinery outages and planned maintenance work outweighed supply issues, traders said.

Light Louisiana Sweet (LLS-) differentials first reached a new nine-month high at $13.50 a barrel over benchmark front-month U.S. crude oil futures but later fell to $10.75 over futures, ending the day $1.25 lower than Wednesday levels.

Mars Sour (MRS (Xetra: MR5.DE - news) -) differentials ended $1.00 lower at $8.00 a barrel over benchmark futures, after trading as high as $10.25 a barrel over futures earlier in the day.

Differentials jumped on Wednesday after reports from the U.S. Energy Information Administration showed regional crude stocks were at one-year low as imports fell to their lowest level since September 2008.

Repairs on Royal Dutch Shell (Xetra: R6C1.DE - news) 's Ship Shoal pipeline were partly behind the recent rally in Gulf Coast grades, a few traders said.

The 390,000 barrels-per-day system, located southwest of New Orleans, includes a 22-inch (56 cm) sour pipeline and a 16-inch (40 cm) sweet crude pipeline to Gibson Terminal in Louisiana and a 20-inch (51 cm) batched pipeline to another terminal in St. James, Louisiana, according to Shell (LSE: RDSB.L - news) 's website.

But refiners are expected to take nearly 1.6 million barrels per day of capacity offline for planned spring maintenance work, according to estimates, which will likely curb demand for oil in the coming weeks.

On Thursday, Marathon Petroleum Corp said it shut a hydrocracker at its 522,000 bpd refinery in Garyville, Louisiana for planned maintenance work.

Chevron Corp's also shut a hydrocracker at its 330,000 bpd Pascagoula, Mississippi, refinery, according to energy intelligence firm Genscape.

Elsewhere, Bakken crude (BAK-) differentials were little changed, bid at $2.30 a barrel under U.S. oil futures and offered at $1.90 under, even as Enbridge Inc (Toronto: ENB.TO - news) reported two pipelines in its North Dakota system were shut due to a power outage.

Enbridge said Lines 81 and 82 on the 475,000 barrels-per-day system were shut after high winds knocked out power at its Minot pumping station.

In the futures market, U.S. crude oil ended 21 cents lower at $93.96 a barrel while international Brent expired 4 cents lower at $107.09 a barrel.

Brent's premium to U.S. crude (CL-LCO1=R) ended at $13.13 a barrel. It had narrowed to $12.35 a barrel earlier, its smallest spread in two weeks.

(Reporting by Selam Gebrekidan; Editing by Meredith Mazzilli)