In a small saucepan, combine vinegar, shallot, sugar, peppercorns and bay leaf; bring to a boil over medium-high heat, stirring to dissolve sugar. Boil until reduced by half, about 6 minutes.
Strain vinegar mixture over cabbage; discard solids. Toss cabbage to coat. Let stand, uncovered, at room temperature, tossing occasionally, for 30 minutes. Add oil and toss to combine. Season with salt and pepper.