Friday, September 10, 2010

Crude Oil Rises After U.S. Pipeline Shut, Report Shows Import Surge by China

Crude oil rose the most in six weeks after a pipeline that carries Canadian crude to refineries in the U.S. Midwest was closed because of a leak. Futures increased as much as 3.1 percent after Enbridge Energy Partners LP shut its Line 6A, part of a system that can transport 670,000 barrels a day from Canada. Chinese customs figures showed that net imports of crude climbed by 10 percent in August from the previous month.

“It’s all about Enbridge,” said Tom Bentz, a broker with BNP Paribas Commodity Futures Inc. in New York. “It’s a big line, which supplies a bunch of refineries in the Midwest. Depending on how long it is shut, this could put a big-sized crimp on supplies in the region.” Crude oil for October delivery climbed $2.12, or 2.9 percent, to $76.37 a barrel at 11:07 a.m. on the New York Mercantile Exchange. The contract touched $76.56, the highest level since Aug. 17. Futures are up 2.4 percent this week.

Oil surged the most since Aug. 2, when prices rose above $81 a barrel for the first time since May as a global equity rally bolstered optimism the economy is strengthening Brent crude oil for October settlement climbed 74 cents, or 1 percent, to $78.21 a barrel on the London based ICE Futures Europe exchange. Brent’s premium over New York oil shrank following the pipeline leak. The London-traded contract was $1.84 higher than Nymex oil, compared with a premium of $3.65 on Sept. 7.

Crews are investigating the pipeline situation, said Glenn Herchak, an Enbridge spokesman. He declined to provide information on what the line was carrying and if it was operating at full rates.....Read the entire article.

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