* Shortcovering lifts crude after Wednesday's 4 pct drop
* Dollar's weakness vs pound also provides oil support
* Bearish data by EIA and IEA still weigh on outlook
* Genscape shows Cushing build of 171,511 bbls -traders (Recasts; updates market activity and adds settlement in U.S. crude)
By Barani Krishnan
NEW YORK, July 14 (Reuters) - Oil prices rose 2 percent on Thursday as traders covered short positions a day after crude futures were hammered after data showing weak U.S. demand for fuel during the traditionally busy summer driving season heightened concerns about a global glut.
Oil was also helped higher as the dollar .DXY weakened on the pound's GBP= rally after the Bank of England's surprise decision not to cut rates. GBP/ weaker dollar tends to make greenback-denominated oil more attractive to holders of other currencies. The UK central bank was widely expected to ease after Britain's vote last month to leave the European Union caused market turmoil. traders said Wednesday's 4 percent slump in oil prices after a raft of bearish U.S. inventory data was excessive.
"It's always the case a day after a big rally or sell-off for people to feel it was overdone," said Phil Flynn, an analyst with Chicago brokerage Price Futures Group.
"The argument is also on what's the fair price for oil? I think $44 is a good support, as $40 or below will again deter investments."
U.S. West Texas Intermediate (WTI) CLc1 settled up 93 cents, or 2.1 percent, at $45.68 a barrel. It rose to $45.80 at the session high.
Brent LCOc1 was up 95 cents, or 2 percent, at $47.21 a barrel by 2:34 p.m. EDT (1834 GMT). The day's peak was $47.47.
U.S. crude stocks fell less than expected last week, while gasoline stocks unexpectedly increased and distillate inventories rose the most since January, the Energy Information Administration (EIA) said on Wednesday. EIA/S
Many had expected record driving trips and low pump prices to boost gasoline usage this summer. A glut in refined products globally is putting crude under pressure, with Middle East grades in particular hit by low Asian demand. CRU/M
Adding to the bearish picture, the International Energy Agency (IEA) said on Wednesday a persistent global crude glut weighed on oil despite demand growth and declines in non-OPEC production. IEA/M
Data on Thursday from market intelligence firm Genscape showed a 171,511-barrel build at the Cushing, Oklahoma delivery hub for WTI futures during the week to July 12, traders said.
Technically, crude may be poised for another fall, said Tamas Varga of PVM Oil Associates in London, who said Brent could break below its 100-day moving average of $44.84 as early as next week.
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http://tmsnrt.rs/29F6Apg GRAPHIC-U.S. oil may retest support at $44.60
http://tmsnrt.rs/29wEVe1
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