Oil jumps on outages; API reports big U.S. crude build
Pumpjacks and other infrastructure for producing oil dot fields outside of Watford City, North Dakota January 21, 2016. REUTERS/Andrew Cullen
By Barani Krishnan
NEW YORK (Reuters) - Brent jumped 4 percent on Tuesday while U.S. crude settled up more than 2 percent, after a late burst of buying driven in part by expectations that record U.S. crude inventories would not swell by as much as they have in recent weeks.
Crude supply outages in Canada, Nigeria and elsewhere also boosted prices. Brent's gain was its biggest one-day percentage move in a month.
The market pared gains briefly in post-settlement trade after the American Petroleum Institute (API), an industry group, said U.S. crude inventories rose by 3.45 million barrels to record highs of 543.1 million during the week ended May 6.
Analysts polled by Reuters had expected a build of only 714,000-barrels. [EIA/S]
Traders and investors will be looking out for official inventory data on Wednesday from the U.S. Energy Information Administration (EIA).
"We should roll back a good part of today's gains if the EIA confirms the builds cited by API or comes up with even larger numbers," said Tariq Zahir, crude trader and managing partner at Tyche Capital Advisors in New York.
Brent
U.S. crude's West Texas Intermediate (WTI) futures
Refined oil products joined the rally, with gasoline
Oil prices were up most of the day on worries about supply outages.
Wildfires in Canada have shut in more than 1 million barrels per day of production from Alberta's oil sands region. Royal Dutch Shell Plc
In Nigeria, attacks on oil infrastructure have pushed crude output close to a 22-year low in Africa's largest oil producer, Reuters data showed.
This year's rebound in oil has been one of the strongest since the financial crisis. Prices have rallied nearly 80 percent from multiyear lows under $30 in the first quarter, supported by falling U.S. production, supply constraints in Libya and the Americas and a weak dollar.
Since the end of April, the rally has stalled at around $45.
(Additional reporting by Amanda Cooper in LONDON and Henning Gloystein in SINGAPORE; Editing by Marguerita Choy and David Gregorio)
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