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Oil Futures Mixed, U.S. Export Permissions Boost WTI Prices

Oil Futures Mixed, U.S. Export Permissions Boost WTI Prices

06/25/2014

 By Eric Yep 

Crude-oil futures were mixed in Asian trade Wednesday with Nymex WTI rallying on an expected drop in weekly U.S. oil stocks and as the U.S. government eased some restrictions on oil exports.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in August traded at $106.72 a barrel at 0455 GMT, up $0.69 in the Globex electronic session. August Brent crude on London's ICE Futures exchange fell $0.21 to $114.25 a barrel.

Late Tuesday, the American Petroleum Institute's data showed a four-million-barrel build in crude-oil stocks for the week ended June 20.

The more definitive report from the U.S. Energy Information Administration is due later Wednesday. Analysts expect U.S. oil inventories to have fallen by 1.2 million barrels.

The U.S. oil benchmark was supported by a Wall Street Journal report saying the Obama administration has allowed two companies to export a type of ultra-light oil known as condensate, the first such move since a ban on selling U.S. crude overseas was put into effect four decades ago.

The news could be a factor in the narrowing of the spread between Brent and WTI crude, Ric Spooner, chief market analyst at CMC Markets said. "Broadly speaking, I would expect the Brent-WTI differential in the short-term to stay around $6," he said. The Brent-WTI spread was recently at $7.55 a barrel.

The beginning of U.S. oil exports underscores the emergence of the U.S. as a major new source of global crude supply, especially with U.S. crude production at 25-year highs.

"It's not just about crude oil. It's about lighter [oil] supplies, condensates and natural gas liquids as well," David Fyfe, head of market research at oil trading company Gunvor, said at the Argus East of Suez Oil Products conference in Singapore.

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