NEW YORK, Aug 10 (Reuters) - Oil jumped almost 4 percent on Monday after a rally in U.S. gasoline and diesel due to a refinery outage helped crude futures advance from multi-month lows.
The dollar's drop to a near two-week low also made oil and other commodities denominated in the greenback more affordable to holders of the euro and other currencies.
Brent, the global benchmark for oil, rose 3.7 percent, posting its largest gain since end-May. U.S. crude rose 2.5 percent, its most in two months.
The rally came after a malfunction at the 240,000-barrels-per-day crude distillation unit at BP's Whiting, Indiana refinery sent gasoline prices soaring more than 4 percent.
Ultra low sulfur diesel gained more than 3 percent, rebounding from last week's six-year lows.
"A reduction in refinery activity should logically decrease the demand for crude, all things being equal," said David Thompson, executive vice-president at Powerhouse, an energy-specialized commodities broker in Washington.
"But the strong link between refined products and crude in the instance of a refinery issue creates the dynamic where the increased demand for the now, temporarily scarce gasoline outweighs the lessened demand for crude."
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