May 14, 2014 - 12:50 AMT
PanARMENIAN.Net - Oil prices extended gains in Asian trade Wednesday, May 14, following comments by a top U.S. energy official that the world's biggest crude consumer is considering lifting a longstanding ban on exports, AFP reports.
New York's main contract, West Texas Intermediate (WTI) for June delivery, was up 38 cents to $102.08 in afternoon trade while Brent North Sea crude for June gained 21 cents to $109.45 per barrel.
Prices were well-supported following "news that the U.S. government is reexamining its crude-oil exports ban in light of growing domestic oil production," Singapore's United Overseas Bank said in a note.
Secretary of Energy Ernest Moniz said Tuesday the U.S. is reviewing its ban on crude exports, but did not specify what options are being weighed.
"A driver for this consideration is that the nature of the oil we're producing may not be well matched to our current refinery capacity," he told reporters in South Korea.
WTI rose $1.11 in New York trade after his comments, while Brent gained 83 cents in London.
Desmond Chua, market analyst at CMC Markets in Singapore, said the news was cheered by U.S. producers clamoring for the export ban to be lifted as local stockpiles remain at record levels.
But less-than-satisfactory transportation links could still hinder the outflow of supplies from storage hubs after the ban is lifted, he said.
"Within the U.S. they still have concerns regarding the expansion of the Keystone XL pipeline," he said, referring to the controversial U.S.-to-Canada pipeline.
"Transportation is the main hindrance due to the development of pipelines in different regions and jurisdiction," AFP quoted him as saying.
The Keystone project has pitted environmental groups against the oil industry, which has argued that it will bring much-needed jobs to the United States and help fulfill the U.S. goal of energy self-sufficiency. Dealers, meanwhile, are awaiting key U.S. stockpiles data for clues about demand ahead of the busy summer driving season.
The Department of Energy's weekly report on crude supplies to be released later Wednesday is expected to show stockpile levels unchanged at 397.6 million barrels for the week to May 9, according to analysts polled by the Wall Street Journal.