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Slower US Oil Exports Pressure Mars Crude Prices, Bloomberg Analysis Says

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Mars crude has weakened as US oil exports retreat from recent highs, reducing support for one of the country's key medium sour crude grades, according to a Bloomberg analysis on Friday.

Mars crude declined in five of the last seven trading sessions, including a roughly 75% drop in value on Wednesday before a modest recovery on Thursday, the analysis said, citing pricing data from Link Data Services.

Strong overseas demand had previously lifted Mars after buyers sought US barrels to replace Middle East supplies disrupted by the Iran conflict.

The premium Mars commands over West Texas Intermediate has narrowed to about $1.50 per barrel from an early-April high of $18/bbl as export demand cooled.

The Energy Information Administration said US crude exports fell by 1.2 million barrels per day to 4.4 million b/d last week after exceeding 6.4 million b/d in April.

Growing demand from domestic refineries and lower US crude inventories have limited the number of barrels available for export markets.

Softer oil consumption trends in China have added pressure to demand for US crude grades that recently attracted strong interest from Asian refiners.

Strong buying from Asian refiners seeking alternatives to Middle East crude boosted demand for Mars and similar grades, while falling inventories at the Cushing, Oklahoma, storage hub weighed on Gulf Coast barrels, the analysis said.

Stockpiles at the Cushing, Oklahoma storage hub dropped to 23 million barrels last week, prompting stronger competition among inland refiners for available crude and adding pressure to Gulf Coast grades, EIA data showed.

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