Oil prices jumped again on Tuesday as a tumbling dollar sent most commodities rallying, bringing crude's four-day rise to about 19 percent, its biggest such advance since January 2009.
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Despite signs that U.S. crude supplies had registered another heavy build last week, investors were more confident that oil prices have hit a bottom after a seven-month rout. Traders said oil bulls were encouraged by BP's plan to cut capital expenditures 13 percent in 2015, which came after reductions announced by other major energy companies.
Benchmark Brent crude oil <LCOc1> settled up $3.16, or nearly 6 percent, at $57.91 a barrel. It rallied as high as $59 for the first time since end of December.
U.S. crude <CLc1>, or WTI, finished up $3.48, or 7 percent, at $53.05, after a session high at $54.24.
A global glut of crude had prompted a sell-off that brought oil prices down about 60 percent from June to late January.
In the last four sessions, Brent and WTI rose about $9 a barrel, or about 19 percent. The rally began on Friday, when oil services firm Baker Hughes said the number of U.S. oil drilling rigs had its biggest weekly decline in nearly 30 years.
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"You've got a number of themes working to push the market higher," said Phil Flynn, analyst at Price Futures Group in Chicago.
On Tuesday, the dollar fell about 1 percent against a basket of currencies <.DXY>, its biggest daily drop since October 2013. This boosted the value of dollar-denominated commodities. [USD/]
Some traders doubted that the oil selloff was over, citing signs of another big weekly build in U.S. crude stockpiles. Crude prices also were pressured as a U.S. refineries strike stretched into a third day.
"It needs to get worse here in terms of productive capacity" before the market can fully recover, said John Kilduff, partner at New York energy hedge fund Again Capital.
He said oil companies could reverse planned cuts in capital spending anytime, "so the desired production cuts may not fully materialize."
Analysts polled by Reuters said they believed U.S. commercial crude oil and gasoline stockpiles likely rose 3.5 million barrels in the week ended Jan. 30, even as distillate inventories fell. Industry group American Petroleum Institute issues inventory estimates for last week on Tuesday at 4:30 p.m. ET.
On Wednesday, the U.S. Energy Information Administration will release official inventory data for last week. [EIA/S]
BP said it would deepen cuts in capital investment this year. CEO Bob Dudley said he expected crude prices to remain soft.
"The market is trying to find its footing. But the fundamentals of production haven't changed. We're in for a minimum year and probably several years of lower prices," Dudley said.
(By Barani Krishnan; Additional reporting by Jessica Resnick-Ault in New York, Himanshu Ojha in London and Jacob Gronholdt-Pedersen and Henning Gloystein in Singapore; Editing by David Evans, Alan Crosby and David Gregorio)