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UPDATE 9-Oil up 4 pct; gasoline adds fuel to rally on Libya, Brazil

Published 04/11/2015, 05:44 am
© Reuters.  UPDATE 9-Oil up 4 pct; gasoline adds fuel to rally on Libya, Brazil
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* U.S. gasoline up nearly 6 pct, ULSD up almost 5 pct

* Brazil strike cuts 25 pct of daily crude output

* Libyan force majeure on crude loadings add to gains

* Coming up: API report on U.S. crude inventories at 2130 GMT (New throughout; adding market's extension of early gains, technical analyst's comments)

By Barani Krishnan

NEW YORK, Nov 3 (Reuters) - Crude prices rose about 4 percent on Tuesday as a rally in U.S. gasoline and diesel added support to oil markets already boosted by an industry strike in Brazil and force majeure for Libyan crude loadings.

The rebound, after a 1 percent drop in crude prices on Tuesday, came ahead of industry group American Petroleum Institute's (API) data on U.S. oil inventories, which were expected to a build in crude stockpiles.

"If you look at the supply situation, the bigger picture is bearish. But the price action suggests the path of least resistance is higher for now," said Scott Shelton, oil broker and commodities specialist at ICAP (L:IAP) in Durham, North Carolina.

Brent LCOc1 was up $1.92, or 4 percent, at $50.71 a barrel by 1:28 p.m. EST (1828 GMT) after hitting a session peak at $50.83.

U.S. crude CLc1 rose $2, or 4.3 percent, to $48.14.

"From a technical point of view, both oil contracts are displaying bullish characteristics, although neither has yet to make a decisive breakthrough," said Fawad Razaqzada, analyst at forex.com. He pegged resistance for Brent at between $51 and $52 and for U.S. crude at above $48.50.

U.S. gasoline RBc1 jumped nearly 6 percent and ultralow sulfur diesel HOc1 almost 5 percent, extending gains in afternoon trade, on expectations the government will report that inventories of refined oil products fell last week despite forecasts that it will also announce a 2.8 million-barrel build in crude. EIA/S

The government's report is due on Wednesday, after the API numbers at 4:30 p.m. EST (2130 GMT) on Tuesday.

Gasoline's "crack" CL-RB1=R , or the profit refiners get for turning crude oil into that motor fuel, hit a one-month high.

An oil workers' strike in Brazil, the ninth biggest global producer, that began on Sunday cut around half a million barrels of output in the first 24 hours and has slowed state-run Petrobras' daily oil output by around 25 percent, according to the union. urn:newsml:reuters.com:*:nL1N12Y1PK

In Libya, the export terminal at the eastern port of Zueitina was closed and force majeure has been declared on crude oil loadings, market sources said. urn:newsml:reuters.com:*:nL8N12Y44J

Oil prices have been trending higher since late October on suggestions of declining U.S. shale oil production.

But Goldman Sachs (N:GS), Wall Street's leading voice on the oil market, said in a report that U.S. crude output could still rise this year and next, citing its study on oil wells.

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