West Texas Intermediate crude exceeds brent for first time in almost 3 years

NEW YORK: West Texas Intermediate crude became more expensive than Brent for the first time in almost three years on Friday as pipeline and rail shipments helped clear a bottleneck that reduced the price of the US benchmark.

WTI hadn't been higher than Brent since August 17, 2010. The move was in intraday trading. WTI averaged $17.47 less than Brent in 2012 and traded as much as $23.44 lower than its European counterpart on February 8.

Improved pipeline networks and the use of rail links are helping to ease the North American oil glut created by rising production of crude from shale formations. WTI has jumped 18% this year, while Brent has decreased 2.5% as North Sea supplies stabilised after maintenance. "The price change reflects the changing balance in the market," said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. "It's the perception of traders that you are not going to have the surplus in the US longer term. We are having more rail and pipeline capacity."

WTI for September delivery rose to 3 cents above Brent futures for the same month in intraday trading. August WTI futures, which expire on July 22, increased 1 cent to $108.05 a barrel on the New York Mercantile Exchange, the highest level for a front-month contract in 16 months. The September contract advanced 6 cents to $107.87. Brent for September settlement dropped 63 cents, or 0.6 percent, to $108.07 on the London-based ICE Futures Europe exchange.