US oil reaches parity with Brent US oil prices have risen above the global crude benchmark Brent for the first time in almost three years, promising higher returns for North American producers who have been wrestling with a supply glut. Amid volatile trading on Friday, Nymex August West Texas Intermediate rose to $107.90 a barrel, up almost 2 per cent on the week. The US benchmark, whose September contract reached the same level as September Brent, was last at parity with the North Sea contract in October 2010. It briefly recorded a premium to the Brent contract, rising 5 cents a barrel against the global benchmark. WTI has traded at a discount to Brent over the past few years as a surge in US oil production - due to the shale boom - led to a glut at Cushing, Oklahoma, the delivery point for the US benchmark. Buying and selling the price difference between the two benchmarks has been popular among oil traders and the move to parity could lead to a review of trading strategies. The recent rise in oil flows out of Cushing, resulting from pipeline capacity increases and other transportation as well as an increase in refining capacity, has pushed WTI closer to Brent this year. Higher prices are likely to encourage more output among US and Canadian oil producers who use the WTI as a benchmark on which to base their crude. Official US data released midweek showed that crude processing rose to an eight-year high in the week to July 12, and inventories at Cushing fell by almost 12 per cent from their peak of 51.9m barrels in January. Analysts said the sharp rise in WTI over the past few days was spurred by financial investors looking to benefit from the "spread" or price difference in the near-term and future contracts for the US benchmark. The spread between the near-term WTI contract and the forward contract that expires in December is about $5 a barrel, some $2 more than the Brent equivalent, indicating that when investors "roll over," or extend their positions, they can make more money by investing in WTI. "The financial flows seeking an optimisation of the roll returns will continue to move out of Brent and into WTI," said Olivier Jakob of oil consultancy Petromatrix. As long as funds continued to transfer into WTI, the US benchmark could trade over Brent, he added. Crude inventories in Cushing could fall further over the coming weeks as the start up of pipelines from the Oklahoma delivery hub to Houston, the focal point for Gulf Coast refiners, are expected to divert crude oil away. However, the strength of WTI is expected to reduce the competitiveness of US oil on the physical markets, eventually resulting in the supplies heading for Cushing. "The recent strength of WTI has meant that Midwest refinery margins have fallen by 68 per cent relative to levels last month," said Miswin Mahesh at Barclays. With addition of transportation costs added, US oil becomes more expensive than some of the imported crude oil, said analysts. In the long run, the WTI-Brent differential is likely to remain wide and Barclays forecasts the spread to average $11 a barrel in 2015.