Oil jumps 2 percent despite glut, hits 2016 peaks on weak dollar

Thu Apr 28, 2016 3:00pm EDT
 
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By Barani Krishnan

NEW YORK (Reuters) - Oil markets jumped 2 percent on Thursday, hitting 2016 highs for a third straight day as a weaker dollar had investors shrugging off record high U.S. crude inventories and relentless pumping by major producers.

Oil prices have surged nearly 80 percent since hitting 12-year lows of around $27 a barrel for Brent in late January and about $26 for U.S. crude in mid-February.

For April, the two benchmarks are up about 20 percent, on track for their largest monthly gain in a year.

The rally, partly driven by the 5 percent drop in the dollar this year, accelerated even though U.S. government data on Wednesday showed crude stockpiles swelled to all-time highs above 540 million barrels last week.

Brent settled up 96 cents at $48.14 a barrel, after hitting a 2016 high of $48.19.

U.S. crude finished up 70 cents at $46.03, after a year-to-date peak at $46.14.

"The market seems invincible, and well supported by money flow," said Scott Shelton, broker at ICAP in Durham, North Carolina.

The dollar tumbled, making oil denominated in the greenback more attractive to holders of the euro and other currencies.   Continued...

 
Oil pump jacks are seen next to a strawberry field in Oxnard, California February 24, 2015.  REUTERS/Lucy Nicholson