U.S. oil futures settled up $1.49 at $78.68 per barrel, rebounding from a four-year-low in the previous session as traders reacted to rumors of a pipeline blast in Saudi Arabia and bullish U.S. crude stocks data.
Data from the Energy Information Administration showed U.S. crude inventories rose 460,000 barrels last week, significantly less than the 2.2 million barrels predicted by analysts in a Reuters poll.
A Saudi Arabian security source said a fire that broke out during repair work at an oil pipeline 156 miles north of the Saudi Arabian capital, Riyadh, was under control, and no terror act was involved. An unconfirmed market rumor of an oil pipeline explosion in Saudi Arabia had sent the market surging earlier.
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"The Saudi rumor definitely shook things up, given that we're living in a world full of threats to oil supply. But we did calm down after that and step back and look at the bigger picture of what the inventories meant," said Phil Flynn, an analyst at Price Futures Group in Chicago.