The price of oil was on the rise Thursday after news of an explosion and fire overnight at a major pipeline in northern Minnesota threatened to cause supply disruptions.
The blaze occurred along the Enbridge Energy Partners LP Lakehead pipeline in northern Minnesota. Two workers were killed.
The pipeline carries crude oil from Saskatchewan, Canada, to the Chicago area, importing nearly 20 percent of U.S. crude.
The jump in prices is a reversal of two days of sharp declines after the government reported oil inventory was sufficient.
Gains on the news Thursday lifted the price of oil a bit to $91 per barrel in midday trade – still well off the record levels that were flirting with $100 a barrel.
The cost of gasoline at the pump continues to hover around $3.
Phil Flynn of Alaron Trading, a Chicago-based firm providing both electronic and pit-based futures trading, says the two-day decline of some $7 was the sharpest drop on record.
"This has been the correction. I think we can say those hundred-dollar dreams are just dreams right now. And we're probably not going to see $100 a barrel of oil this year," he said.
The U.S. Energy Department trigged the slide when it reported bigger-than-expected stockpiles of crude oil and gasoline. It said that demand for gasoline had grown only slightly in the past month.
Falling crude oil prices haven't filtered to the retail level yet. AAA said the average price at the gas pump rose slightly to a national average of about $3.10 a gallon.
The pipeline, which actually consists of four separate conduits, was completely shut down for a while.
But two of the four lines were restarted Thursday morning, said Larry Springer, a spokesman for Houston-based Enbridge, and the other two lines were expected to return to service soon.
A third line, designed to carry heavy crude, "remains shut down but is expected to return to service later (today) as it has now been confirmed that it was not damaged as a result of the incident," Enbridge said in a statement.
The fire-damaged line could be repaired and returned to service within two or three days, the company said.
Mark Zdechlik reports from Minnesota Public Radio.
With additional reporting from The Associated Press