Oil Jumps On Weaker Dollar; Traders Wary Of Stock Build
NEW YORK, Jan 27 (Reuters) - Oil prices jumped as much 3 percent on Tuesday as a weaker dollar propped up commodities priced in the currency, prompting short-covering in a market that has sold off with little pause over the past seven months.
The market rallied despite expectations of another large build in U.S. crude stocks last week, and surprised some traders. But others said they did not think oil was on the cusp of an extended recovery due to nagging worries about the global oversupply in crude.
An updated Reuters poll showed U.S. crude inventories rose 4.1 million barrels, on average, in the week to Jan. 23. That added to the previous week's build of over 10 million barrels, the biggest in 14 years, to the highest level on record for this time of year.
Genscape, which tracks oil inventories, reported a near 2.4 million-barrel build last week in Cushing, the Oklahoma delivery point for U.S. crude futures, a market source said.
The American Petroleum Institute (API), an industry group, will release its weekly inventory report at 2130 GMT. Government data will be issued on Wednesday morning.
"Given the expectations in supply, it's kind of surprising to see the market pop this much today," said Andrew Lipow, president at Lipow Oil Associates in Texas.
"There's probably some short-covering after the extended selloff we've had for weeks now, but I don't think fundamentally anything's changed."
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