(Bloomberg) -- Crude in New York traded at a premium to Brent for the first time since January amid speculation that the lifting of a U.S. export ban may help alleviate the U.S. supply glut.
West Texas Intermediate oil closed 3 cents higher than Brent. The U.S. passed legislation that ended the 40-year prohibition of crude exports on Dec. 18. U.S. crude inventories probably increased by 1.2 million barrels last week, according to a Bloomberg survey before an Energy Information Administration report Wednesday.
"The movement of the spread has to be at least in part due to the lifting of the export ban," said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. "I think the spread is going to fluctuate on either side of parity going ahead."
Crude is heading for a second annual loss on signs the global glut will be prolonged after the Organization of Petroleum Exporting Countries effectively abandoned output limits at a meeting earlier this month. Prices have also reacted to record production in Russia and rising U.S. supplies. U.S. inventories are about 130 million barrels above the five-year seasonal average.
WTI for February delivery rose 33 cents, or 0.9 percent, to close at $36.14 a barrel on the New York Mercantile Exchange. The volume of all futures traded was 33 percent below the 100- day average at 2:57 p.m.
Brent for February settlement slipped 24 cents, or 0.7 percent, to end the session at $36.11 a barrel on the London- based ICE Futures Europe exchange. Futures touched $35.98, the lowest since July 2004. The European benchmark crude traded at as much as a 9-cent discount to WTI on the ICE.
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