LONDON (AFP) — World oil prices rebounded strongly Thursday as a fire struck a Canadian pipeline sending crude to the United States, the world's biggest consumer of energy.
Oil futures had tumbled Wednesday on a smaller-than-expected decline in US energy reserves and ahead of next week's OPEC output meeting.
Approaching midday trade, New York's main contract, light sweet crude for January delivery, was up a massive 3.45 dollars at 94.07 dollars a barrel.
Brent North Sea crude for January surged 2.14 dollars to 91.95 dollars.
Enbridge Inc said late Wednesday that an explosion in the northern US state of Minnesota forced the company to shut down four pipelines.
Enbridge's oil pipeline system serves major refineries in Canada's Ontario province as well as the Great Lakes region of the United States, delivering about 2.2 million barrels per day.
"News of an explosion at the Enbridge Minnesota terminal will resurrect supply concerns," said Bank of Ireland analyst Paul Harris.
In Paris, the head of the International Energy Agency, Nobuo Tanaka, said the IEA was closely "monitoring" the situation but described the incident as "not substanial."
Nevertheless, he added, "if necessary we will use our emergency measures."
Oil prices had Wednesday closed down more than three dollars in New York owing to the latest data on US energy inventories.
The US Department of Energy (DoE) said US crude inventories had fallen by 400,000 barrels in the week to November 23. Analysts had forecast a drop of 1.0 million barrels.
Meanwhile stocks of distillates, which include heating fuel, shed only 100,000 barrels last week. The market forecast had been for a drop of 1.2 million.
Distillate stocks are being closely watched in the run-up to the northern hemisphere winter, when demand for heating fuel tends to soar.
The DoE added that US refinery usage jumped to 89.4 percent of capacity, up 2.4 percentage points compared with a week earlier.
"Crude futures were sharply lower yesterday, following the weekly US fuel inventories report," Sucden analyst Michael Davies said Thursday.
Oil prices are enduring great volatility since reaching almost 100 dollars a barrel last week. New York crude last week struck a record high of 99.29 dollars on concerns over tight oil supplies.
The market, meanwhile, is gearing up for next week's OPEC output meeting in Abu Dhabi. Saudi Oil Minister Al-Nuaimi on Wednesday insisted the world oil market was well supplied and that high prices did not properly reflect the supply-demand situation.
Asked whether Saudi Arabia, the world's biggest oil exporter, would push for an increase in production at next Wednesday's meeting, Nuaimi said the cartel would first need to see market data.
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