Prices for petroleum rebounded over 2% on Thursday after posting the biggest two-day loss for the start of a year in three decades with the shutdown of a U.S. fuel pipeline providing support, though economic concerns capped gains.
Big declines in the previous two days were driven by worries about a global recession, especially since short-term economic signs in the world’s two biggest oil consumers, the United States and China, looked weak.
Helping drive the gains on Thursday was a statement from top U.S. pipeline operator Colonial Pipeline, which said late on Wednesday its Line 3 had been shut for unscheduled maintenance with a restart expected on Jan. 7.
Brent crude was up $1.63, or 2.1%, to $79.47 U.S. a barrel Thursday morning, while U.S. West Texas Intermediate crude gained $1.41, or 1.9%, to $74.25.
Both benchmarks’ cumulative declines of more than 9% on Tuesday and Wednesday were the biggest two-day losses at the start of a year since 1991, according to Refinitiv Eikon data.
Reflecting near-term bearishness, the nearby contracts of the two benchmarks traded at a discount to the next month, a structure known as contango.
Also weighing were inventory figures from the American Petroleum Institute, which according to market sources showed a rise in U.S. crude and gasoline stocks.
Official inventory data from the Energy Information Administration was due out Thursday morning around 10:30 a.m. EST.