* U.S. crude stockpiles drop more than expected
* Gasoline and distillate builds also surprise market
* Prices up earlier on Nigeria attacks, China
* 5-week low in dollar also helped prop oil
(New throughout, updates prices and market activity to show
Brent rising to 2016 highs after settlement)
By Barani Krishnan
NEW YORK, June 8 (Reuters) - Crude futures rose on
Wednesday, hitting 2016 highs above $50 a barrel and settling up
for a third straight day on worries about sabotage of oil
facilities in Nigeria, although a build in U.S. gasoline stocks
amid peak summer demand could pressure prices.
U.S. crude stocks fell for the third consecutive week,
sliding by 3.2 million barrels versus analysts' expectations for
a 2.7 million-barrel drawdown, government data showed. EIA/S
But gasoline inventories grew by 1 million barrels and
distillates, which include diesel and heating oil, rose by 1.8
million barrels, versus forecasts of drawdowns.
This indicates a sentiment that gasoline demand will weaken
more than expected or that the crude glut will be reflected by a
gasoline glut, said Troy Vincent, crude oil analyst for New
York-headquartered energy data provider ClipperData.
Brent crude LCOc1 settled up $1.07 at $52.51 a barrel. It
extended gains in post-settlement trade, reaching $52.60 a
barrel by 3:55 p.m. EDT (1955 GMT), the highest since October.
U.S. crude futures CLc1 rose 87 cents, or 1.7 percent, to
settle at $51.23 a barrel. The session high was $51.34, a peak
since July.
"The gasoline build was a big surprise, specially since the
driving season is underway," said Tariq Zahir, managing partner
at Tyche Capital Advisors in New York, which specializes in
long-dated spread trades in U.S. crude futures.
Zahir said the market was experiencing a momentum trade in
spot crude helped by a weaker dollar, while longer-dated oil
remained in contango, or pricier to the spot contract, due to
builds in products such as gasoline and distillates. "This, in
our opinion, should limit the gains in spot prices."
Oil rallied early, after the Niger Delta Avengers militant
group said it had blown up a Chevron (NYSE:CVX) oil well in Nigeria,
rejecting peace talks with the government. Rebel attacks have
brought oil output in Nigeria, once Africa's largest crude
producer, to a 20-year low.
Prices were also supported by data showing China's May crude
oil imports at over six-year highs.
The dollar's .DSX drop to five-week lows boosted demand
for greenback-denominated oil from holders of other currencies.
FRX/
Crude futures have nearly doubled from 13-year lows of $27
for Brent and $26 for WTI this winter.
"The trend is your friend and picking tops can be painful as
all of the money out there chasing trends from the systematic
side of the market can overwhelm," said Scott Shelton, broker at
ICAP (LON:IAP) in Durham, North Carolina.