OREANDA-NEWS. February 14, 2017.   Offshore US medium sour crude Mars soared to a new one-year high today on rising export interest, particularly from Asia-Pacific, amid higher-than-expected Opec production cut compliance.

Mars traded at discounts to West Texas Intermediate (WTI) between \\$1.75/bl and \\$1.60/bl so far today, its narrowest prompt-month discount since 25 February 2016. The key grade already rose more than 20?/bl on 10 February to trade at a discount narrower than \\$2/bl for the first time in the same period.

A recent Argus analysis indicates Opec production could have fallen by as much as 1.15mn b/d in January, pointing to a 98pc adherence to the group's cut pledge. With less Opec oil moving to Asia-Pacific, new trade patterns are emerging to keep eastern markets supplied. US Gulf coast crudes are now being sought to fill the shortfall in medium and heavy sour grades left by Mideast Gulf cuts. US exports rose to a record high of well over 600,000 b/d in January, and are likely to continue expanding this year, possibly reaching 1mn b/d.

The widespread implementation of the Opec and non-Opec cuts helped push oil prices to 18-month highs of nearly \\$55.80/bl in January, and prices are holding steady at close to that level this month.

Higher crude differentials are creating arbitrage opportunities out of the US as sellers find plenty of delivery options.

A widening Brent/WTI spread has opened the market for crude exported out of the US, which now appears more economic to foreign buyers who would otherwise purchase alternative crude against a more expensive pricing basis. The spread between Nymex WTI and Ice Brent, which came close to parity on 9 May 2016, was assessed at \\$2.16/bl today.