UPDATE 8-Oil prices rise on nagging fears of fuel shortages

* Colonial aims for substantial resumption in operations
this week
* COVID-19 outbreak hits Indian fuel demand
* U.S. crude inventories fall, gasoline stocks rise: API

(Updates with API data)
By Laura Sanicola
NEW YORK, May 11 (Reuters) - Oil prices settled higher on
Tuesday, as lingering fears of gasoline shortages due to an
outage at the largest U.S. fuel pipeline system after a cyber
attack brought futures back from an early drop of more than 1%.
Brent crude LCOc1 futures rose 23 cents, or 0.3%, to
settle at $68.55 a barrel while U.S. West Texas Intermediate
(WTI) crude CLc1 futures rose 36 cents, or 0.6%, to end the
session at $65.28.
Benchmark gasoline futures prices RBc1 ended the session
0.3% higher at $2.1399 a gallon.
On Monday, Colonial Pipeline, which transports more than 2.5
million barrels per day (bpd) of gasoline, diesel and jet fuel,
said it was working to restore much of its operations by the end
of the week. "While the short-term risk is being played down, the market
is still visibly shaken by the event, given the nature of the
attack and the scale of the infrastructure," said Rystad
Energy's oil markets analyst Louise Dickson.
"The market is now concerned about the likelihood of such an
event being repeated and about the severity of future attacks."
Fuel supply disruption has driven gasoline pump prices to
multi-year highs and demand has spiked in some areas served by
the pipeline as motorists fill their tanks.
"With little information forthcoming from the private
company, the market appears to be proceeding on the assumption
that normal flows will resume by the upcoming weekend and since
no operational problems appear to exist, this guidance would
appear correct." said Jim Ritterbusch, president of Ritterbusch
and Associates.
U.S. crude oil inventories fell by 2.5 million barrels in
the most recent week, according to two market sources on
Tuesday, citing American Petroleum Institute figures.
Gasoline inventories rose by 5.6 million barrels
Traders booked at least four tankers to store refined oil
products off the U.S. Gulf Coast refining hub after a cyber
attack that knocked out the pipeline, shipping data showed on
Tuesday. North Carolina, the U.S. Environmental Protection Agency and
Department of Transportation issued waivers allowing fuel
distributors and truck drivers to take steps to try to prevent
gasoline shortages.
OPEC on Tuesday raised its forecast for demand for its crude
by 200,000 bpd and stuck to its prediction of a strong recovery
in global oil demand this year as growth in China and the United
States counters the coronavirus crisis in India. Meanwhile, the rapid spread of infections in India has
increased calls to lock down the world's second-most populous
country and the third-largest oil importer and
consumer. India's top state oil refiners have already started reducing
runs and crude imports as the new coronavirus cuts fuel
consumption, company officials told Reuters on Tuesday.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Indian oil refiners cut output, imports as pandemic hits demand
government working to aid top fuel pipeline operator after
cyberattack Colonial fuel pipeline shutdown mean U.S. pump
prices rise? ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>