Oil rebounds from early drop on modest Cushing stock build

By Barani Krishnan

NEW YORK (Reuters) - 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 U.S. crude.

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

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

The front-month in benchmark Brent crude, down nearly $1 earlier in the session, turned positive, gaining 20 cents to $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 U.S. 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 U.S. crude for the week ended Feb. 27, taking stocks to beyond 444 million barrels.[EIA/S]

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

(Additional reporting by Christopher Johnson in London and Keith Wallis in Singapore; Editing by Jason Neely, William Hardy, David Evans and Tom Brown)