* Prices up on looming oil industry strike in Norway, weak
dollar
* API reports nearly 4 mlns bbls crude draw last week
* Analysts had expected drawdown of 2.4 mln bbls
* Coming up: U.S. government crude inventory data, Wednesday
(New throughout, updates prices and market activity, adds
comments after API data)
By Barani Krishnan
NEW YORK, June 28 (Reuters) - Oil prices jumped 3 percent or
more on Tuesday with investors buying back into the market after
a two-day rout triggered by Britain's vote to leave the European
Union.
Potential oil supply outages and crude inventory drawdowns
also returned investors' attention to market fundamentals.
A looming strike at several Norwegian oil and gas fields
helped put a floor beneath crude futures after an 8 percent
price slump over two days.
Investors were also counting on a sizeable and a sixth
weekly drop in U.S. crude stockpiles.
The American Petroleum Institute (API) indicated in a
preliminary report that crude inventories could have fallen
nearly 4 million barrels for the week to June 24, some two-thids
more than the 2.4 million barrels expected by analysts. EIA/S
API's data showed refineries had boosted output last week,
anticipating strong fuel demand ahead of the July 4 U.S.
Independence Day holiday weekend. API/S
The U.S. Energy Information Administration will issue
official stockpiles data on Wednesday. EIA/S
Brent crude LCOc1 settled up 3 percent, or $1.42, at
$48.58 per barrel. It extended gains in post-settlement trade on
the API data, reaching $48.79.
U.S. crude CLc1 rose 3.3 percent, or $1.52, to settle at
$47.85. It got to $48.18 in after-hours trade.
"It's the season for higher refinery runs and I think the
API figures are rightly reflecting that," said Carl Larry,
director of business development for oil and gas at New York
consultancy Frost & Sullivan.
In the two past two sessions, oil fell nearly $4 a barrel on
fears of market contagion from the Brexit vote. Brent hit
seven-week lows under $47 on Monday and U.S. crude a one-month
trough below $46.
Tuesday's rebound was helped by the dollar's .DXY retreat
from three-month highs, making greenback-denominated crude less
expensive for holders of other currencies. MKTS/GLOB
Even so, some analysts were wary.
Data showed Nigeria's oil production back up at around 1.9
million barrels per day from an early June low of 1.6 million
bpd. Nigeria had been the focus of supply outages over the past
few months due to rebel attacks on oil
infrastructure.
"I would categorize today's current move higher as a
corrective move after the strong push lower since last
Thursday," Dominick Chirichella, senior partner at the Energy
Management Institute in New York, said, pinning a neutral to
slightly bearish view on crude prices.
"More time is needed to safely say the down move in oil is
officially over."