US oil prices rise, edge above Brent

[NEW YORK] US oil prices edged up on Tuesday as the American oil benchmark finished above its European counterpart only days after the US lifted an oil-export ban.

US benchmark West Texas Intermediate for delivery in February rose 33 cents to US$36.14 a barrel on the New York Mercantile Exchange.

Brent North Sea crude for delivery in February dipped 24 cents to US$36.11 in London, its lowest level since 2014.

Analysts warned oil could be vulnerable ahead of a weekly petroleum inventory release on Wednesday by the US Department of Energy.

Tuesday's gains "looks like consolidation ahead of US weekly inventory data amid light volume book squaring ahead of the holidays," said Tim Evans, analyst at Citi Future.

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.

"I don't think the US supply demand fundamentals are improving very much," said Kyle Cooper of IAF Advisors. "I still see a bearish report on tomorrow."

Tuesday 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," Mr Kilduff said.

However, Mr Kilduff noted that Tuesday's trade 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," Mr Kilduff said.

AFP