Oil Gains Over 2% On Inventory Draws, Iraq Fighting


NEW YORK, May 21 (Reuters) - Oil prices jumped more than 2 percent on Thursday, giving Brent its biggest rally in more than a week, as draws reported in the Cushing delivery point for U.S. crude futures boosted optimism that a supply glut was easing.

Fighting in Iraq that raised worries about the security of Middle East oil shipments also boosted the market.

The dollar's retreat took some pressure off crude prices as well. The greenback snapped a broad three-day run-up and fell against the euro for the first time in a week, making dollar-denominated commodities more affordable to holders of other currencies.

Inventories of U.S. crude in Cushing, Oklahoma fell by almost 740,000 barrels between Friday and Tuesday, trade sources said, citing a report by market intelligence firm Genscape.

The report added to the fervor of oil bulls, already inspired by Wednesday's U.S. government data showing the third straight weekly decline in crude stockpiles across the United States.

"All these drawdowns indicate the supply glut we've been having is easing, so not surprisingly more people are going long oil and those who aren't are covering shorts," said Phil Flynn, analyst at the Price Futures Group in Chicago.

U.S. crude settled up $1.74, or nearly 3 percent, at $60.72 a barrel.


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Brent Crude Oil : $50.79/BBL 1.30%
Light Crude Oil : $49.96/BBL 1.10%
Natural Gas : $2.77/MMBtu 2.12%
Updated in last 24 hours