NEW YORK: Oil prices fell on Thursday on the prospect of a key Canada-to-U.S. crude pipeline that shut after a leak returning to service soon, putting a hefty amount crude back into the market at the same time that global economic slowdowns raised fuel demand fears.
Brent crude lost 67 cents, or 0.9 percent, to $76.50 a barrel by 1629 GMT, while U.S. West Texas Intermediate crude shed 17 cents, or 0.2 percent to $71.84.
Canada's TC Energy said it shut its giant 622,000 barrel-per-day Keystone crude oil pipeline, which is the primary line shipping heavy Canadian crude from Alberta to the U.S. Midwest and Gulf Coast, after a spill into a Kansas creek.
Oil prices rose after the company announced the closure of the line, which was shut at about 8 p.m. CT Wednesday (0200 GMT Thursday), but the market has since changed its sentiment.
"The concern about the Keystone situation is just not there anymore, and I think that will get back up and running in no time so it won't be a material loss of crude from that pipeline hiccup," said John Kilduff, partner at Again Capital LLC in New York. "We're back looking at the demand outlook." The energy markets are weighed down by fears of an economic slowdown, weakening fuel demand and the prospect of more U.S. interest rate hikes. The Federal Reserve is widely expected to raise interest rates by 50 basis points next week.