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MTECHTIPS:-Crude oil rebounds along with U.S. gasoline, weaker dollar helps

MTECHTIPS:-Crude oil rebounds along with U.S. gasoline, weaker dollar helps

Oil jumped almost 4 percent on Monday after a rally in U.S. gasoline and diesel due to a refinery outage helped crude futures advance from multi-month lows. The dollar’s (DXY) 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. [USD/] Brent, the global benchmark for oil, rose 3.7 percent, posting its largest gain since end-May. U.S. crude rose 2.5 percent, its most in two months. The rally came after a malfunction at the 240,000-barrels-per-day crude distillation unit at BP’s Whiting, Indiana refinery sent gasoline prices soaring more than 4 percent. Ultra low sulfur diesel gained more than 3 percent, rebounding from last week’s six-year lows. “A reduction in refinery activity should logically decrease the demand for crude, all things being equal,” said David Thompson, executive vice-president at Powerhouse, an energy-specialized commodities broker in Washington. “But the strong link between refined products and crude in the instance of a refinery issue creates the dynamic where the increased demand for the now, temporarily scarce gasoline outweighs the lessened demand for crude.” Brent crude settled up $1.80 at $50.41 a barrel. It hit a six-month low of $48.24 earlier in the session. U.S. crude settled $1.09 up at $44.96 a barrel. It plumbed a 4-1/2 month of $43.35 in Asian trading. Brent lost 23 percent of its value in the past six weeks and U.S. crude 26 percent, pushed down by an oil glut.
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