Oil rose slightly on Thursday, giving back nearly all of its early gains after Enbridge Pipeline said its fire-damaged crude pipeline in Minnesota could restart within days. An explosion along the Canada-to-United States pipeline, which supplies more than 10 percent of US crude imports, killed two workers and choked off crude flows Wednesday.
But Enbridge said Thursday two of the four pipelines shut had already been restarted, and that the remaining lines could come back into service within a few days - easing concerns of a severe supply disruption.
US crude settled up 39 cents to $91.01 a barrel after zipping as high as $95.17 earlier in the day. Brent crude was up 45 cents to $90.26 a barrel. The US Department of Energy said it was prepared to open up the emergency crude stockpile to compensate for the disruption, but had yet to receive any requests. The incident on the Enbridge line comes after four other leaks this year on parts of the system, which runs from Alberta into the Midwest.
"I think cooler heads are prevailing here and we are heading back to the level we were going to before this happened," said Phil Flynn, analyst at Alaron Trading in Chicago. "It doesn't look as bad as it first looked." Oil has risen 40 percent since August and has come close to breaking the $100 mark, driven by the weak dollar, concerns over shrinking supplies ahead of winter and speculative inflows.
But prices have fallen back from the highs amid rising worries over the US economy, a rally in the US dollar and expectations of a supply increase from Opec.
The Organisation of the Petroleum Exporting Countries is set to meet on December 5 in Abu Dhabi, with some members favouring a boost to production. The recent volatility in the market has shown its sensitivity to supply disruptions, experts said.
"A long delay in (the pipelines) resuming operation, along with failure by Opec to increase output at its 5 December meeting and unexpectedly cold weather in the United States, might just be enough to provide the necessary impetus to finally take crude to $100 a barrel," said Lawrence Poole, energy analyst at research firm GlobalInsight.
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