Oct 24 (Reuters) - West Texas Intermediate at Midland's discount to U.S. crude reached the widest level in two weeks on Wednesday, a day after Energy Transfer LP said its West Texas Gulf pipeline remained offline for maintenance that was prolonged after an oil spill, traders said.
WTI Midland WTC-WTM traded at a $6.25 per barrel discount to U.S. crude on Wednesday after Dallas-based Energy Transfer said late on Tuesday the pipeline, which runs from Colorado City to Longview, Texas, was still undergoing testing.
Pipelines out of West Texas have filled as production in the Permian basin, the largest U.S. oilfield, surged and any unforeseen outages in the region can lead to sudden swings in regional prices.
The planned maintenance was slated for about 10 days from Oct. 10-20.
A spokeswoman for Energy Transfer did not immediately comment on the timeline for testing to be completed.
The company had said last week the pipeline would resume normal operations over the weekend after it spilled water with nontoxic green dye and residual crude oil near Abilene, Texas during a hydrotest.
The delay appeared to be the catalyst for the discount for WTI Midland prices widening, traders said.
WTI Midland had firmed to a $2.50 per barrel discount to U.S. crude last week as traders focused on Plains All American Pipeline LP's new pipeline expansion out of the Permian Basin in West Texas. The inland grade had previously reached a six-year low of $18.25 per barrel in late August as pipeline capacity constraints weighed on the price.
Also weighing on Midland prices was planned maintenance at the El Paso, Texas refinery owned by Marathon Petroleum Corp. The plant has about 135,000 barrels per day of refining capacity and is expected to be back online in early November, traders said. (Reporting by Collin Eaton in Houston and Devika Krishna Kumar in New York Editing by Susan Thomas)