* Crude prices hit year highs for 3rd day in row
* Dollar sinks to 2-week lows, boosting oil
* Market ignores near-term glut
(Updates with market settlements, adds new milestones for the
year)
By Barani Krishnan
NEW YORK, April 28 (Reuters) - Oil markets jumped 2 percent
on Thursday, hitting 2016 highs for a third straight day as a
weaker dollar had investors shrugging off record high U.S. crude
inventories and relentless pumping by major producers.
Oil prices have surged nearly 80 percent since hitting
12-year lows of around $27 a barrel for Brent in late January
and about $26 for U.S. crude in mid-February.
For April, the two benchmarks are up about 20 percent, on
track for their largest monthly gain in a year.
The rally, partly driven by the 5 percent drop in the dollar
this year, accelerated even though U.S. government data on
Wednesday showed crude stockpiles swelled to all-time highs
above 540 million barrels last week. EIA/S
Brent LCOc1 settled up 96 cents at $48.14 a barrel, after
hitting a 2016 high of $48.19.
U.S. crude CLc1 finished up 70 cents at $46.03, after a
year-to-date peak at $46.14.
"The market seems invincible, and well supported by money
flow," said Scott Shelton, broker at ICAP (LON:IAP) in Durham, North
Carolina.
The dollar tumbled, making oil denominated in the greenback
more attractive to holders of the euro and other currencies.
FRX/
Analysts believe the global oil glut will start to ease in
the second half of this year, and traders and investors have
been pushing prices higher in hopes they are right.
"Clearly, the market is primarily focused on the forward
supply-and-demand picture while continuing to push the bearish
nearby fundamentals further into the background," said Dominick
Chirichella, senior partner at the Energy Management Institute
in New York.
While U.S. oil production has fallen, imports of crude have
risen and the global glut looks to grow as major exporters from
Saudi Arabia to Russia and Iran ramp up output in a battle for
market share.
"Imports to U.S. Gulf Coast refineries have shown
broad-based strength. Saudi imports haven't been at this level
since April 2015," said Matt Smith of crude cargo trackers
Clipperdata, which noted inflows above 1.2 million barrels of
Saudi crude in the United States last month.
Oil near or above $50 a barrel could make drilling
attractive again for U.S. shale producers, which would add to
the glut and pressure prices.
"For producers struggling to meet debt payments and avoid
breaching the terms of loan covenants, rising prices are a
chance to lock in future revenue and reduce downside risks,"
Reuters analyst John Kemp said in a commentary.
GRAPHIC on U.S. crude oil production http://tmsnrt.rs/244AKvS
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