Crude oil rebounds along with U.S. gasoline, weaker dollar helps

NEW YORK (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 near session lows 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.

In Monday's session, gasoline futures jumped almost 4 percent, heading for its largest daily gain in a month, after BP Plc's 240,000 barrel per day crude distillation unit at its Whiting, Indiana, refinery, was shut by a malfunction on Saturday, sources familiar with operations at the plant said.

Futures of ultra low sulfur diesel rose more than 3 percent, rebounding from last week's six-year lows.

Brent crude was up $1.47, or 3 percent, at $50.08 a barrel by 12:53 p.m. EDT after hitting a six-month low of $48.24 earlier in the session.

U.S. crude or West Texas Intermediate (WTI) rose 91 cents, or 2 percent, to $44.79, up from its session low in Asian trading at $43.35, its lowest in 4-1/2-months.

Both benchmarks have been falling for six weeks, hampered by a supply glut.

"Brent is stronger than WTI so far this morning. That would also tend to support the crack spreads," said David Thompson, executive vice-president at Powerhouse, an energy-specialized commodities broker in Washington.

Crack spreads, or refining margins, hit a one-week high for gasoline .

The Brent-WTI spread , another key trade in oil, moved back to the $5-per-barrel level in Brent favor for the first time in 10 days.

The difference between WTI's front-month and second month was at its highest in three weeks as concerns over the Whiting refinery weighed on prompt oil.

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 after larger-than-expected builds in gasoline stocks as refiners ran at record pace.

(Additional reporting by Claire Milhench in London and Aaron Sheldrick in Tokyo; Editing by Marguerita Choy)

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