Oil prices rise before US data
Around midday in London, benchmark contract Brent North Sea crude for delivery in February was up 39 cents at $36.50 a barrel compared with Tuesday’s close.
New York’s West Texas Intermediate for February won 37 cents to $36.51 a barrel.
Analysts said Wednesday’s report from the Department of Energy on US oil inventories could reverse the recent gains.
The worry is that the DoE report will be a repeat of last week’s that showed big increases in stocks of oil and key petroleum products.
Tuesday meanwhile marked the first time since January that WTI traded above Brent.
John Kilduff, a founding partner at Again Capital, said the push of WTI above Brent could mark a “new phase” between the two contracts in the wake of last week’s measure passed by the US Congress and signed into law by President Barack Obama to lift a 40-year ban on US oil exports.
“It seems to be a bit of a reaction to the lifting of the US crude export ban and what that portends about the ability of US producers to hit international markets in a more substantial way,” Kilduff said.
However, Kilduff noted that Tuesday’s price gains may have been distorted by low trading volume as well as by end-of-year crude destocking in the US Gulf Coast for tax purposes.
“You have to be very careful of drawing any conclusions between now and the end of the month,” Kilduff said.
World oil prices have particularly slumped since December 4 when OPEC decided against limiting production despite tepid demand and a supply glut, as exporters fight to keep market share.
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