* Gasoline, diesel rally lift crude from multi-month lows
* Brent up 3 percent, U.S. crude rises about 2 percent
(Adds comment, latest market moves)
By Barani Krishnan
NEW YORK, Aug 10 (Reuters) - Crude oil prices jumped as much
3 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 earlier in the session.
The dollar's .DXY 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. USD/
Hedge funds and other big speculators raised their bullish
exposure to U.S. crude for the first time in seven weeks, trade
data on Friday showed, even as most traders and investors feared
weaker demand and higher supplies ahead. ID:nL1N10I26G
In Monday's session, gasoline futures RBc1 jumped almost 4
percent, heading for its largest daily gain in a month, after
BP (LONDON:BP) Plc's 240,000 barrel per day crude distillation unit at its
Whiting, Indiana, refinery, was shut by a
malfunction. ID:nIGB34AC77 ID:nL1N10L13O
Futures of ultra low sulfur diesel HOC1 rose more than 3
percent, rebounding from last week's six-year lows.
Brent crude was up $1.50, or 3 percent, at $50.11 a barrel
by 1:26 p.m. ET (1726 GMT) after hitting a six-month low of
$48.24 earlier in the session.
U.S. crude CLc1 rose 80 cents, or 1.9 percent, to $44.67,
up from its session low in Asian trading at $43.35, its lowest
in 4-1/2 months.
Both benchmarks had fallen in the past six weeks, hampered
by a supply glut.
"The strength in refined products is pulling crude prices
higher today," said David Thompson, executive vice-president at
Powerhouse, an energy-specialized commodities broker in
Washington.
"A reduction in refinery activity should logically decrease
the demand for crude, all things being equal. 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."
Refining margins hit a one-week high for gasoline CL-RB1=R
and 2-1/2 month peak for diesel CL-HO1=R .
Refined oil products usually rally during the summer in the
United States, when driving activity peaks.
This year, the run-up in gasoline came as early as April but
lost steam lately as some traders and investors deemed the
market had gotten ahead of itself.
Despite the strength in U.S. crude's prompt price, its
discount to Brent CL-LCO1=R was back at $5-per-barrel for the
first time in 10 days.
The U.S. crude complex's structure also weakened, with
nearby contracts at a wider discount to longer-dated oil. The
front-month's discount to the second-month CLc1-CLc2 was at
its highest since mid-July.