Oil above $37 as U.S. supply tightens, still near 11-year low

(Reuters) - Oil edged further above $38 a barrel on Thursday before retreating as it remained within sight of an 11-year low reached this week, as traders put positions in order ahead of an expected week of low liquidity ahead.

U.S. crude has gained support from falling inventories, reduced drilling and the lifting of a ban on most U.S. crude exports, which has pushed U.S. crude to a premium to global benchmark Brent for the first time in about a year. CL-LCO1=R

Brent LCOc1 settled up 53 cents at $37.89 a barrel as of 11:48 a.m. EST. It fell to $35.98, an 11-year low, on Tuesday. U.S. crude CLc1 settled up 60 cents at $38.10 after gaining more than 8 percent this week.

"Some traders playing spot on the downside are getting out and calling it a year," said Tariq Zahir, managing partner at Tyche Capital Advisors.

U.S. crude futures have seen support from fundamentals including the lifting of a four-decade ban on crude exports.

"The lifting of the ban on U.S. exports will provide some underlying support for U.S. crude. Oil demand in 2015 was exceptionally high and at current prices, demand is going to remain strong next year," said Olivier Jakob, analyst at Petromatrix.

"For now, there is still an ample supply of crude and a huge amount in storage." (Full Text)