US refinery outage helps lift oil over $50 a barrel
Crude oil prices jumped as much as 3pc yeserday after a rally in US petrol and diesel due to a refinery outage helped crude futures advance from multi-month lows earlier in the session.
The dollar's drop to a near two-week low also made oil and other commodities denominated in the greenback more affordable to holders of the euro and other currencies.
Hedge funds and other big speculators raised their bullish exposure to US crude for the first time in seven weeks, trade data on Friday showed, even as most traders and investors feared weaker demand and higher supplies ahead.
In yesterday's session, petrol futures jumped almost 4pc, heading for its largest daily gain in a month, after BP's 240,000 barrel per day crude distillation unit at its Whiting, Indiana, refinery, was shut by a malfunction. Futures of ultra low sulphur diesel rose more than 3pc, rebounding from last week's six-year lows.
Brent crude was up $1.50, or 3pc, at $50.11 a barrel by close of business in Europe after hitting a six-month low of $48.24 earlier in the session.
US crude rose 80 cents, or 1.9pc, to $44.67, up from its session low in Asian trading at $43.35, its lowest in four and a half months.
Both benchmarks had fallen in the past six weeks, hampered by a supply glut.
"The strength in refined products is pulling crude prices higher," said David Thompson, executive vice-president at Powerhouse, an energy-specialized commodities broker in Washington.
Refining margins hit a one-week high for gasoline and two and a half-month peak for diesel, boosted by summer holiday driving in the United States. (Bloomberg)