Oil prices climbed on Monday, adding to Friday's powerful rally, but gains were capped by an estimate of another strong weekly build in U.S. crude stocks, traders said.
A U.S. refinery strike, which theoretically meant higher crude supplies in the market, and disappointing U.S. consumer spending and manufacturing data also pared Monday's early gains.
U.S. crude closed up $1.33, at $49.57 a barrel, it highest in nearly a month. It hit an intraday high of $50.56 and session low of $46.67.
The spread between Brent and U.S. crude widened to above $5 a barrel, its biggest since November.
was last up $1.44 at $54.50 a barrel shortly, after swinging in a wide band of between $55.62 and $51.41.
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Traders said oil services company Genscape estimated a stock build of 2.3 million barrels in the Cushing, Oklahoma, delivery point for U.S. crude last week, adding to already record-high oil inventories in the country.
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The U.S. Energy Information Administration plans on Wednesday to report official stock numbers for Cushing and other oil market data for the week ended on Friday.
"We saw some strength in the market this morning, but that's being sold into," said Tariq Zahir, managing member of Tyche Capital Advisors in Laurel Hollow, New York.
"I think people were trying to play off again on Friday's rally on the assumption that the market's found a bottom, but I don't think that's the case yet."
Speculators in Brent had raised their net long positions by 1,056 contracts to 143,039 in the week to Jan. 27, exchange data showed on Monday, as some took the view that crude prices were stabilizing from the selloff that began in the summer.
On Friday, Brent rose 8 percent, its biggest daily gain since 2009, after data showed U.S. oil drilling rigs had fallen their most in a week in nearly 30 years following a seven-month rout in crude prices. Month-end covering by traders taking profits on earlier short positions added fuel to the rally.
Union workers at nine U.S. refineries and chemical plants were on strike for the second straight day as they sought a new national contract with oil companies covering laborers at 63 facilities.
The strike boosted refined oil product prices in the United States and Europe, as traders anticipated more arbitrage opportunities opening up to the west.