* Smaller-than-expected Cushing crude build boosts prices
* Oil up more than 40 pct from lows hit 2 months ago
* PIRA says OPEC seeks $50/barrel for oil near-term
(New throughout, updates prices and market activity, OPEC's bid
for $50 bottom)
By Barani Krishnan
NEW YORK, March 7 (Reuters) - Brent crude rose on Monday,
hitting a 2016 peak above $40 a barrel as producers sought a new
anchor price for oil after a selloff that has lasted nearly two
years, although some analysts warned the global glut is still
big.
Global crude prices have risen more than 40 percent since
two months ago when they hit 12-year lows. Monday's gains were
helped by data showing a smaller-than-expected build in
stockpiles at the Cushing, Oklahoma delivery hub for U.S. crude
futures and talk that OPEC was looking at a $50 bottom.
Oil's rebound from lows of around $26 a barrel was also
driven by chart-related buying and asset rotation by investors
that resulted in higher allocations into commodities such as oil
and copper, as well as equities. U.S. equities have risen about
8 percent since mid-February while Treasuries have weakened.
Asian equities hit 2-month highs on Monday. MKTS/GLOB
"Money flows from broader financial markets are powering
this broader rally in oil," said Scott Shelton, energy broker
with ICAP (LON:IAP) in Durham, North Carolina. "I don't think the energy
fundamentals for the next few days are going to matter much as
the market is making a transition."
Brent LCOc1 , the global crude benchmark, was up $1.20 at
$39.92 by 11:12 a.m EST (1612 GMT). Earlier, it hit a 2016 high
of $40.11, after the 12-year low of $27.10 on Jan. 20.
U.S. crude CLc1 was up $1.10 at $37.02 a barrel, after
hitting a two-month high at $37.46. On Feb. 11, it hit a 2003
low of $26.05.
Price gains accelerated after market intelligence firm
Genscape reported that crude stockpiles at the Cushing, Oklahoma
delivery hub rose by 670,714 barrels to reach 68.8 million
during the week ended March 4, traders said. In the previous
week to Feb. 26, Genscape reported that Cushing inventories rose
by more than 1 million barrels.
Bets on rising Brent crude prices hit a record high in the
week to March 1. Major OPEC producers are privately starting to
talk about a new oil price equilibrium of $50, New York-based
consultancy PIRA told Reuters.
Technical analysts said the oil rally could be nearing
exhaustion at $40. Others said the global crude market remained
oversupplied by around 2 million barrels per day, while higher
prices raised the prospect of U.S. shale oil producers adding
more drilling rigs after recent cutbacks.
Morgan Stanley (NYSE:MS) said "a large portion" of the rally was due
to dollar depreciation.
"Thus, prices can continue to rally on headlines and a
dollar pullback, but the upside should be limited by bloated
global inventories and producer hedging," it said in a note.
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