US crude for October jumped to near $75 today after a leak forced Enbridge to shut down the biggest pipeline supplying Canadian oil to refineries in the Midwest and to a key storage hub in Oklahoma.
Enbridge closed its 670,000 barrel per day (bpd) Line 6A, the largest of the company's major three, after a leak was discovered in Illinois. The duct accounts for between 7-8 per cent of total US crude imports.
Front-month US crude for delivery in October jumped as much as 1 per cent to $74.97 and was up 50 cents at $74.75 a barrel at 0407 GMT, while the November contract added just 1 cent to $75.80.
Contracts further out fell after a government report yesterday showed total US petroleum inventories climbed to a fresh all-time high on a weekly basis. Record stockpiles at the world's largest oil-consuming nation have this month depressed the price of US crude relative to European Brent.
"Some people had been selling WTI and buying Brent crude, but now they are covering their shorts, and thereby they have to buy back WTI at the front of the curve," said Tetsu Emori, a fund manager at Tokyo-based Astmax Co.
Brent posted its biggest premium to WTI since mid-May earlier this week at more than $3.50 a barrel, shrinking today to about $2.35.
Asian stocks rose to a four-month high today as some investors were inspired by positive US and Japanese economic data to pick out bargains, with the shift to riskier assets weighing on the yen.
Despite the increase in overall US petroleum inventories last week, crude stockpiles dropped 1.85 million barrels to 359.9 million in the week to September 3rd as imports declined and refineries processed more crude, the Energy Information Administration reported yesterday.
US distillate stocks fell 388,000 barrels last week, according to the EIA, against analyst expectations for a 600,000 barrel rise, while stocks of gasoline fell 243,000 barrels compared with forecasts for a larger draw of 900,000 barrels.
Storms are expected to cause losses of about 20 million more barrels of US crude oil production in the Gulf of Mexico before the Atlantic hurricane season ends on November 30th, the EIA said yesterday.
Oil imports by China, the world's second-largest petroleum user, rose 13 per cent in August from a year earlier. China brought in 20.9 million tonnes of crude from abroad last month, and imports for the first eight months gained 22.6 per cent to 157.87 million tonnes, the General Administration of Customs said on its website.
Reuters