Oil prices rise on pipeline closure, but remain below December 2021 lows

SINGAPORE Reuters -- Oil prices bounced on Friday as a major Canada-to-US crude pipeline shut down supplies, but prices remained near December 2021 lows due to concerns over slowing global demand growth.

The price of crude futures was at $76.74 a barrel at 0115 GMT, up 59 cents, or 0.8%, after dropping 1.3% on Thursday.

The U.S. West Texas Intermediate crude rose by 68 cents, or 1%, to $72.14 a barrel after settling 0.8% lower in the previous session.

The news of an accident closing Canada's Keystone pipeline in the United States prompted a rally on Thursday, but prices slowed as the market believed that the closure would be brief. One of the largest crude spills in the United States in nearly a decade has been caused by more than 14,000 barrels of crude oil spilled into a creek in Kansas.

The news seems to be only short-term negative for supplies but doesn't change anything with the deteriorating crude demand outlook OANDA analyst Edward Moya said in a note.

He said that the Biden administration is expected to consider refilling the strategic petroleum reserve because of the WTI prices close to the $70 level.

RBC Capital analyst Robert Kwan said that previous spills are usually rectified in about two weeks.

The economic growth of China will be negatively affected by surging infections in the next few months, bringing a rebound only later in 2023, according to economists.