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U.S. crude prices flip into premium over Brent as exports loom, inventories dip

Published 23/12/2015, 11:25 am
© Reuters.  U.S. crude prices flip into premium over Brent as exports loom, inventories dip
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By Henning Gloystein

SINGAPORE, Dec 23 (Reuters) - U.S. crude oil prices have moved into a premium over internationally traded Brent as an unexpected drop in American inventories tightened the system, while global markets still suffer from ballooning oversupply.

Front-month U.S. West Texas Intermediate (WTI) crude futures CLc1 were trading at $36.40 per barrel at 0015 GMT, up 26 cents from their last settlement.

This flipped WTI from a long-standing discount into a premium over Brent LCOc1 which settled at $36.38 a barrel on Tuesday and has yet to be traded Wednesday.

"WTI prices have outperformed Brent and also traded at a premium. There is renewed speculation that the lifting of a U.S. export ban may help ease the U.S. oversupply issues," ANZ bank said on Wednesday.

The U.S. congress this month voted to lift a 40-year-old ban to export domestic crude supplies, and although no immediate large-scale exports are expected, this does mean that some American oil will flow from the United States into the global market next year, shifting the oil balance.

Stronger WTI prices were also supported by an unexpected rise in U.S. crude stocks, as reported by industry group the American Petroleum Institute showed on Tuesday.

Crude inventories fell by 3.6 million barrels in the week to 486.7 million, compared with analysts' expectations for a increase of 1.1 million barrels. urn:newsml:reuters.com:*:nZXN04MH00

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