Fire halts price decline

30 November 2007

A pipeline fire in Minnesota helped to arrest the fall in crude oil prices on Thursday.

Two repair workers were killed by the fire in the Enbridge Energy Partners Lakehead pipeline, which carries crude oil from Canada to refineries in the US.

Worries about the incident's impact on supplies saw the price of US crude rise by more than $4 to $95.17 (£46.07) a barrel on Thursday morning.

However, once it became clear that only one of the pipeline's four conduits had been affected and that the impact on supplies to refineries in Indiana and on the Gulf coast would be minimal, prices dropped again.

At the close of trading on Thursday US crude was up 39 cents at $91.01 and London Brent crude had climbed 41 cents to $90.22.

Meanwhile, analysts have predicted crude oil prices are likely to fall further in the next few days following signs that the dollar's slump in the currency markets is over and speculation that the Organisation of Petroleum Exporting Countries will agree to increase output.