Economic concerns, including fears of a global recession, had driven the previous two days' decline. However, the shutdown of a major U.S. fuel pipeline provided some support for the rebound. Brent crude was up $1.75, or 2.3%, to $79.59 a barrel, while U.S. West Texas Intermediate crude gained $1.63, or 2.2%, to $74.47.
Factors Influencing Oil Prices
Concerns about a global recession, particularly in the United States and China, have recently weighed on oil prices. Figures showing a contraction in U.S. manufacturing in December and concerns about economic disruption in China due to COVID-19 have also pressured prices. According to the American Petroleum Institute, inventories of crude and gasoline in the United States have also risen. Official data from the Energy Information Administration will be released at 1530 GMT.
Shutdown of Colonial Pipeline Provides Support for Prices
The shutdown of Colonial Pipeline's Line 3 for unscheduled maintenance supported oil prices on Thursday. The line is expected to restart on January 7th. Despite the rebound, the overall trend remains down, with analysts describing the current market as a bear market. Nearby contracts for Brent and West Texas Intermediate crude are also trading at a discount to the next month, a structure known as contango.