Oil jumps on weaker dollar; traders wary of stock build
By Barani Krishnan
NEW YORK (Reuters) - Oil jumped as much as 3 percent on Tuesday as a weak dollar propped up commodities, but crude prices came off their highs in post-settlement trading on signs of another big U.S. supply build last week.
Oil prices were up most of the day, tracking the dollar, despite concerns about rising U.S. inventories. While some traders expressed surprise with the market's behavior, others shrugged it off as they did not think oil was on the cusp of an extended recovery because of nagging worries about the global oversupply in crude.
The American Petroleum Institute (API), an industry group, said after the market's close that U.S. oil stockpiles surged by nearly 13 million barrels last week. [API/S]
A Reuters poll showed U.S. crude stockpiles rose by 4.1 million barrels, on average, in the week to Jan. 23. That would add to the previous week's build of over 10 million barrels, the biggest in 14 years, which had already brought inventories to the highest level on record for this time of year. [EIA/S]
Genscape, which tracks oil inventories, reported a near 2.4 million-barrel build last week in Cushing, the Oklahoma delivery point for U.S. crude futures, a market source said.
Official data on last week's inventories will be reported by the U.S. Energy Information Administration on Wednesday.
"Given the expectations in supply, it's kind of surprising to see the market pop this much today," said Andrew Lipow, president at Lipow Oil Associates in Texas.
"There's probably some short-covering after the extended selloff we've had for weeks now, but I don't think fundamentally anything's changed." Continued...