Oil jumps as dollar dives, crude up 19 percent in four days

[mick silver]

Oil jumps as dollar dives, crude up 19 percent in four dayshttp://l.yimg.com/a/p/us/news/editorial/d/0c/d0c3eb8ca18907492a4b337b5cec5193.jpeg (http://www.reuters.com/) By Barani Krishnan 33 minutes ago









http://l1.yimg.com/bt/api/res/1.2/IKqZJAvDTglTW2Nr_DaaIA--/YXBwaWQ9eW5ld3M7Zmk9ZmlsbDtoPTIwMDtxPTc1O3c9MzAw/http://media.zenfs.com/en_us/News/Reuters/2015-02-03T015856Z_1006950001_LYNXMPEB12022_RTROPTP_2_CBUS INESS-US-MARKETS-OIL.JPG (http://news.yahoo.com/oil-firm-two-day-rally-china-demand-outlook-015856711.html#) . View photo

A gas station employee refuels a motorcycle in Brasilia November 7, 2014. REUTERS/Ueslei Marcelino





By Barani Krishnan
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NEW YORK (Reuters) - Oil prices jumped again on Tuesday as a tumbling dollar sent most commodities rallying, bringing crude's four-day rise to about 19 percent, its biggest such advance since January 2009.
Despite signs that U.S. crude supplies had registered another heavy build last week, investors were more confident that oil prices have hit a bottom after a seven-month rout. Traders said oil bulls were encouraged by BP's plan to cut capital expenditures 13 percent in 2015, which came after reductions announced by other major energy companies.
Benchmark Brent crude oil <LCOc1> settled up $3.16, or nearly 6 percent, at $57.91 a barrel. It rallied as high as $59 for the first time since end of December.
U.S. crude <CLc1>, or WTI, finished up $3.48, or 7 percent, at $53.05, after a session high at $54.24.
A global glut of crude had prompted a sell-off that brought oil prices down about 60 percent from June to late January.
In the last four sessions, Brent and WTI rose about $9 a barrel, or about 19 percent. The rally began on Friday, when oil services firm Baker Hughes said the number of U.S. oil drilling rigs had its biggest weekly decline in nearly 30 years.
"You've got a number of themes working to push the market higher," said Phil Flynn, analyst at Price Futures Group in Chicago.
On Tuesday, the dollar fell about 1 percent against a basket of currencies <.DXY>, its biggest daily drop since October 2013. This boosted the value of dollar-denominated commodities. [USD/]
Some traders doubted that the oil selloff was over, citing signs of another big weekly build in U.S. crude stockpiles. Crude prices also were pressured as a U.S. refineries strike stretched into a third day.
"It needs to get worse here in terms of productive capacity" before the market can fully recover, said John Kilduff, partner at New York energy hedge fund Again Capital.
He said oil companies could reverse planned cuts in capital spending anytime, "so the desired production cuts may not fully materialize."
Analysts polled by Reuters said they believed U.S. commercial crude oil and gasoline stockpiles likely rose 3.5 million barrels in the week ended Jan. 30, even as distillate inventories fell. Industry group American Petroleum Institute issues inventory estimates for last week on Tuesday at 4:30 p.m. ET.
On Wednesday, the U.S. Energy Information Administration will release official inventory data for last week. [EIA/S]
BP said it would deepen cuts in capital investment this year. CEO Bob Dudley said he expected crude prices to remain soft.
"The market is trying to find its footing. But the fundamentals of production haven't changed. We're in for a minimum year and probably several years of lower prices," Dudley said.
(Additional reporting by Jessica Resnick-Ault in New York, Himanshu Ojha in London and Jacob Gronholdt-Pedersen and Henning Gloystein in Singapore; Editing by David Evans, Alan Crosby and David Gregorio)


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View Comments (188)

[madfranks]

Is this going to save the US shale oil companies?

[osoab]

Is this going to save the US shale oil companies?

Maybe when we hit 90 frns per barrel in a couple of more years.

[Horn]

Putin must've just finally finished re-positioning himself on the lowside of the ball.

[Neuro]

Maybe when we hit 90 frns per barrel in a couple of more years.
It won't take that long. My bet is to the summer, we'll have triple digit barrels. Saudi Arabia was promised higher prices for their co-operation in the Putin crush. War is coming!

[Ponce]

Maybe when we hit 90 frns per barrel in a couple of more years.

Sorry buddy, a year or (much) less, the banksters cannot let all that money get away from them.......I told you a while back that it was going to start going up right away.

V

[mick silver]

Oil refinery strike negotiators back at the table
http://money.cnn.com/2015/02/03/news/companies/oil-refinery-strike/index.html
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Major U.S. oil strike underway





Negotiators from Shell Oil and the United Steelworkers have returned to the table as a strike at nine oil refineries entered its third day Tuesday. The union insists the first large scale refinery strike in 35 years has nothing to do with pay, benefits or the falling price of oil, but instead is about worker safety.





"This issue is about the company's refusal to look at and bargain over safe working conditions," USW President Leo Gerard told CNN Monday. "It's about making sure we have a fatigue standard that they don't manipulate."
Gerard said workers are working 12 hour shifts for two or more weeks in a row, making workers susceptible to accidents.
The union is also fighting for limits on outside contractors doing maintenance work. The contractors don't have the same level of safety training or familiarity with the ins and outs of the refineries as the full-time workers, said USW spokeswoman Lynn Hancock.
Shell (RDSA (http://money.cnn.com/quote/quote.html?symb=RDSA&source=story_quote_link)), which is leading negotiations for management on the industry-pattern pact with the union, says it wants to reach an agreement with the union.
"While there are areas where Shell and the USW have common interests, it's unfortunate that the union has chosen to use a strike as a means to resolve areas where we differ," said Shell spokesman Ray Fisher. Fisher said protecting the health and safety of its workers, contractors and neighbors is a top priority for all of its operations, and that it expects contractors to have safety standards that meet or exceed those of Shell.
ExxonMobil (XOM (http://money.cnn.com/quote/quote.html?symb=XOM&source=story_quote_link)), which has employees covered by the nationwide contract, said it won't comment on negotiations but that it wants to reach a deal "to allow us to operate safely."
Related: Big oil loses $200 billion from oil price crash (http://money.cnn.com/2015/01/07/investing/big-oil-price-energy-stocks/index.html?iid=EL)
The union insists it was management who broke off talks just before the 12:01 a.m. Sunday contract expiration and that the union had no choice but to call a strike (http://money.cnn.com/2015/02/01/news/economy/oil-worker-strike/index.html?iid=EL) at nine refineries -- five in Texas, two in California, and one each in Washington State and Kentucky.
Still, most of the 30,000 USW members working at 65 refineries nationwide remain on the job, including at many Shell refineries. Just fewer than 4,000 are on strike.
Related: Oil giant Shell cuts spending by $15 billion (http://money.cnn.com/2015/01/29/investing/oil-shell-cuts-spending/index.html?iid=EL)
USW members refine nearly two-thirds of the nation's oil. Other unions such as the Teamsters and Operating Engineers bring the percentage of oil refined at unionized refineries to just above 75%, so the union doesn't face much in the way of competition from non-union facilities.
The union says it will decide on a day-to-day basis whether to expand the strike.
Most of the struck refineries remain operating with management running the facility. That can continue for a long time -- refineries basically stayed open through the last national strike, a 4-month walk-out in 1980.
That means that drivers probably won't see much impact from the strike, even if gas prices have been creeping higher (http://money.cnn.com/2015/01/28/news/economy/gas-prices-climb/index.html?iid=EL) for the last week after the national average bottomed out at just above $2 a gallon.
"I've never seen a refinery strike that had an impact that lasted more than a few hours," said Tom Kloza, chief oil analyst with the Oil Price Information Service. Market prices for both crude and wholesale gasoline swung between slightly lower and slightly higher in the first day of trading after the start of the strike.
Are you an oil worker on strike? Email (chris.isidore@turner.com;%20gregory.wallace@turne r.com) us your story