U.S. crude rises as supplies tighten, exports loom

U.S. crude prices rose for a fourth straight session in early Asian trading on Thursday, headed for a 9 percent weekly gain in the lead-up to Christmas as the U.S. market tightened on the back of falling supplies and looming exports.

A worker checks steel pipes at an oil field preparing for oil and gas exploitation in Yilong, Sichuan province December 10, 2008.

Front-month West Texas Intermediate (WTI) crude futures CLc1 were trading at $37.74 per barrel at 0315 GMT (10.15 p.m. ET Wednesday), up 0.6 percent on the day and set for the biggest weekly gain since early October.

With internationally traded Brent futures LCOc1 trading at $37.60 a barrel, U.S. crude defended a premium it regained this week for the first time in around a year CL-LCO1=R.

The strengthening U.S. market is a result of falling stocks, reduced drilling activity, and looming exports following the lifting of a 40-year old ban of most U.S. crude exports.

On the production front, Baker Hughes reported that U.S. oil drillers cut rigs for a fifth week in the last six, a sign drillers were waiting on higher prices before returning to the well pad. WTI was little changed after the report.

The tightening physical market came just as U.S. energy group Enterprise and oil trader Vitol raced to exploit the end of the ban on most U.S. crude exports, loading a 600,000-barrel cargo of domestic light crude oil scheduled for the first week of January, although the destination was not immediately clear.

U.S. crude prices have fallen over 10 percent since the beginning of the month and remain almost two-thirds below mid-2014 when prices began to tumble.