Oil rebounds from early drop on modest Cushing stock build

[NEW YORK] Oil prices rose on Monday, rebounding from early losses, after market data firm Genscape reported a modest stock build last week at the Cushing, Oklahoma delivery point for US crude.

A strong dollar, which hit 11-year highs against other major currencies, and worries about US crude inventories reaching another record peak last week weighed on prices earlier.

The front-month contract in US West Texas Intermediate (WTI) crude jumped US$1, or about 2 per cent, to US$50.61 a barrel by 10:58 am EDT (1458 GMT). It traded below US$50 prior to the Cushing build data.

The front-month in benchmark Brent crude, down nearly US$1 earlier in the session, turned positive, gaining 20 cents to US$59.93 a barrel.

Genscape reported a 157,000-barrel hike at the Oklahoma oil hub delivery for oil from Monday through Friday last week, a trader who saw the data said, adding that the "market expected a lot more" in builds.

The data eased some concerns in the market about US crude inventories having hit record highs for a ninth straight week from new builds. The government last reported a total inventory of gain of more than 10 million barrels for US crude for the week ended Feb 27, taking stocks to beyond 444 million barrels.

Goldman Sachs analysts said in a note to clients that oil prices would reverse recent gains due to rising global inventories. They forecast US crude would drop to around US$40 a barrel.


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