Trading sources said Hetco, a trading firm partly owned and backed by US energy giant Hess Corp has taken control of ten North Sea crude oil cargoes, which traders said give it more influence over the spot market.
Tighter supplies in the North Sea and soaring emerging market demand for oil has pushed Brent crude oil futures close to USD 100 a barrel for the first time since October 2008.
By contrast, US crude futures have traded at an uncommon discount to Brent since August, with bulging inventories around the delivery point for the NYMEX contract in Cushing, Oklahoma weighing on prices.
"It's a story of relative supply," said Andy Lebow, a trader at MF Global in New York.
"Brent has seen tight supplies and good demand from Asia, while the expectations are supplies will remain at high levels around Cushing."
Late on Tuesday, the American Petroleum Institute said US crude stocks rose by 3.53 million barrels in the week to January 14, while distillate and gasoline stocks also rose by 940,000 and 1.86 million barrels respectively, despite a drop in refinery output. Stocks at Cushing fell by 571,000 barrels, according to the API.
In London, ICE Brent crude for March rose 36 cents, to settle at USD 98.16 a barrel, just over a dollar below the 27-month high of USD 99.20 hit last Friday. It slipped in post-settlement trade to $97.95 after the API numbers.
Volumes on Brent were 16 percent above the 30-day average with over 4.26 million barrels changing hands.
US crude futures for February delivery fell 52 cents to settle at $90.86 a barrel, one day ahead of the contract's expiry, in relatively thin trade. Prices slipped another 22 cents in post-settlement trade.
US oil product futures were stronger, with both RBOB gasoline futures and heating oil futures hitting the highest since October 2008.
Tim Evans, an analyst at Citigroup Futures Perspective in New York, said a dip in US equity markets was, "shifting the immediate focus from a weaker US dollar to worries over the strength of the US recovery".
Goldman, arguably the world's most powerful bank and one of the biggest financial players in commodities, posted a 53 percent decline in fourth-quarter profits on Wednesday, as revenue from fixed income, commodity and currency trading fell.
In the broader economy, groundbreaking on new US home construction fell to its lowest level in over a year in December, suggesting the battered housing sector remains a major roadblock to the recovery.
Commodity prices were supported as the euro rallied to an eight-week high above USD 1.35 against the dollar. Analysts said there is rising confidence European policymakers will stop the debt crisis that has engulfed Greece and Ireland from spreading.
Analysts and traders, however, including some of the Kingdom's big customers, were skeptical and said that Saudi output was flat in December. Rising demand with no clear increase in supply from the producer group has been one of the factors pushing Brent toward USD 100.
For now, technical analysts saw oil as neutral and said Brent was unlikely to breach the 27-month high of USD 99.20 reached last week.