SINGAPORE: Oil prices rose in Asian trading hours Wednesday after the US benchmark WTI overtook its European counterpart Brent in reaction to the lifting of a 40-year US crude exports ban.
But Brent regained lost ground and analysts said an imminent report by the Department of Energy on US oil inventories could reverse recent gains ahead of the long Christmas Day weekend.
At 0300 GMT, the two standards stood roughly at parity.
West Texas Intermediate for February delivery was up 20 cents at $36.34, while Brent for February stood at $36.36, 25 cents above its ending price in London.
WTI had risen to as much as $36.56, Bloomberg News reported.
“Market participants cheered the Congress approval for the removal of the 40-year ban on US crude exports,” said Bernard Aw, market strategist at IG in Singapore.
The export ban was imposed in 1975 to protect US energy supplies after the Arab oil embargo shook the American economy.
Aw said the outlook for crude, which is around 60 percent off its high of above $100 in summer 2014, was still “bearish” due to global oversupply.
Another analyst said the WTI-Brent parity underscored the severe worldwide glut in black gold.
“With WTI now pretty much at parity with Brent and Brent being the global oil benchmark, that really indicates a massive oversupply situation in the world,” Victor Shum, a Singapore-based vice president at consultancy IHS Inc., told Bloomberg News.
Prices have particularly slumped since December 4 when the OPEC oil producers group decided against limiting production despite tepid demand and the supply glut as exporters fight to keep market share.