Navtej Kohli‘s blog brings update on unsteady oil prices.
World oil prices rebounded modestly from recent falls since a pipeline carrying crude from Central Asia to the West exploded locking up the oil supply for about 15 days tentatively.
New York‘s main contract, light sweet crude for September delivery rose 1.44 dollars to close at 120.02 dollars a barrel.
In London, Brent North Sea crude for September edged up 0.86 cents to settle at 117.86 dollars per barrel.
A fire that started on Tuesday was likely to continue burning for another two days until the oil remaining in the pipeline runs out, after which repairs would begin.
Despite modest price gains on Thursday, the oil market has dived lower this week on mounting concern that slower economic growth in the United States, the world’s thirstiest energy guzzler, would translate into a decline in global energy demand.
The US government reported Monday that consumer spending, which fuels two-thirds of US output, had cooled in June and inflationary pressures accelerated.
Prices extended their slide on Tuesday as signs of a slowing global economy raised further doubts about demand.
Crude futures also lost ground on Wednesday after news of a surprise jump in US oil reserves, traders said.
The US Department of Energy announced in its weekly report that American crude reserves had increased by 1.7 million barrels in the week ended August 1.
The reading caught the market off guard because expectations had been for a 200,000-barrel decline.
Traders are closely tracking the level of US gasoline stockpiles amid the ongoing peak-demand summer driving season, when many Americans normally take to the roads for their summer holidays.
Oil futures have shed about 20 percent in value since hitting record highs above 147 dollars per barrel on July 11.
“Overall, the market remains at a crossroad. Market participants are torn between persistent fears over slowing energy demand and potentials for further supply disruptions,” said Sucden analyst Andrey Kryuchenkov.