Oil up 4 percent; gasoline adds fuel to rally on Libya, Brazil

Tue Nov 3, 2015 5:00pm EST
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By Barani Krishnan

NEW YORK (Reuters) - Crude prices settled up about 4 percent on Tuesday as a rally in U.S. gasoline and diesel amid an outage on a key pipeline system added support to oil markets already boosted by an industry strike in Brazil and force majeure for Libyan crude loadings.

The market also ended up ahead of a report from industry group American Petroleum Institute (API) suggesting a 2.8 million-barrel build in U.S. crude inventories last week. The build matched forecasts by analysts in a Reuters poll. [API/S] [EIA/S]

The U.S. Energy Information Administration will issue official stockpiles data on Wednesday.

"If you look at the supply situation, the bigger picture is bearish. But the price action suggests the path of least resistance is higher for now," said Scott Shelton, oil broker and commodities specialist at ICAP in Durham, North Carolina.

Brent LCOc1 settled up $1.75, or 3.6 percent, at $50.54 a barrel, after hitting a session high at $50.91.

U.S. crude CLc1 finished up $1.76, or 3.8 percent, at $47.90. The day's peak was $48.36.

U.S. crude extended gains briefly in post-settlement trade, after the API data.

"Both oil contracts are displaying bullish characteristics, although neither has yet to make a decisive breakthrough," said Fawad Razaqzada, technical analyst at forex.com. He pegged resistance for Brent at $51-$52 and for U.S. crude at above $48.50.   Continued...

A worker watches a crude oil train approach the loading rack at the Eighty-Eight Oil LLC's transloading facility in Ft. Laramie, Wyoming July 15, 2014. REUTERS/Rick Wilking