- Oil fell over 9% in first two days of year, most since 1991
- Colonial shuts down Line 3 for unplanned maintenance
- API figures shows U.S. crude, gasoline stocks rise – sources
- Coming up: EIA supply report, 1530 GMT
LONDON, Jan 5 (Reuters) – Oil rebounded 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. “This morning’s rebound is due to the shutdown of Line 3 of the Colonial pipeline,” said Tamas Varga of oil broker PVM. “There is no doubt that the prevailing trend is down; it is a bear market,” he added. Brent crude was up $1.22, or 1.6%, to $79.06 a barrel at 0922 GMT, while U.S. West Texas Intermediate crude futures gained $1.02, or 1.4%, to $73.86. 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 situation known as contango. NN: I want a upward bias in our oil trade. But i still believe oil has some more work to do to the downside. So we are in a slightly bullish spread…..Legging out on our shorts taking some nice profits.