U.S. crude prices briefly rose to a premium over internationally traded Brent on Wednesday following a report of a surprise dip in U.S. inventories and the potential for more exports in an oil market which still suffers from ballooning oversupply.
Front-month U.S. West Texas Intermediate (WTI) crude futures CLc1 were trading at $36.38 per barrel at 0340 GMT, up 24 cents from their last settlement.
Brent crude earlier traded as low as $36.28 a barrel, briefly flipping WTI from a long-standing discount into a slight premium over the international benchmark for the first time since a short period in November 2014. Brent edged back to $36.44 by 0340 GMT. Except for November last year, WTI has traded at a discount to Brent since 2010.
Spreads for contracts delivered further into 2016 CL-LCO8=R CL-LCO3=R have already seen a WTI premium over Brent for much of December.
Prior to 2010, WTI was usually at a premium to Brent as the U.S. shale oil boom had yet to kick off, meaning that the world’s biggest oil consumer had higher crude and fuel imports.
U.S. petroleum imports have fallen from a peak of almost 14 million barrels per day (bpd) to around 9 million bpd, according to government data.
But as shale output dips and the government lifts a decades-old crude export ban, the U.S. market could tighten while supplies globally keep ballooning on the back of soaring output from Russia and the Organization of the Petroleum Exporting Countries (OPEC).
The U.S. Congress this month voted to lift the ban to export domestic crude supplies, and although no immediate large-scale exports are expected, some American oil will flow from the United States into the global market next year.
Stronger WTI prices were also supported by an unexpected fall in U.S. crude stocks, as reported by industry group the American Petroleum Institute.
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.