* Enbridge close to completing Canada-U.S. duct repairs
* Technicals show U.S. crude may reach $79 []
* Coming Up: U.S. EIA weekly oil inventories; 1430 GMT
(Updates prices, adds graphic)
By Alejandro Barbajosa
SINGAPORE, Sept 15 (Reuters) - Oil fell for a second day on
Wednesday as Enbridge prepared to restart the biggest
Canada-U.S. crude pipeline, raising expectations of a
short-lived shutdown that would limit the drainage of
record-high inventories.
U.S. crude for October <CLc1> fell 45 cents to $76.35 a
barrel by 0659 GMT, a steeper drop than the 16 cent decline in
the European marker ICE Brent <LCOc1> to $79, because of the
localised impact of the pipeline outage.
Enbridge said Tuesday it was near to completing repairs on
the duct and might be able to restart the line without
submitting to a lengthy formal approval process from U.S.
regulators. A report signalled the restart may come by the end
of the week. [] []
"This situation has been priced in, so now that it is going
to restart earlier than expected, prices have re-adjusted,
causing the prompt WTI price to weaken much more than Brent,"
said Serene Lim, a Singapore-based oil analyst at ANZ.
The premium of front-month Brent over West Texas
Intermediate (WTI), the U.S. benchmark priced at the Cushing
storage hub in Oklahoma, widened to about $2.65 a barrel on
Wednesday after narrowing to less than $1.40 earlier this week.
It was wider than $3.50 a week ago, before the line halted
flows.
For a related graphic: http://link.reuters.com/vew63p
Enbridge said it was welding a stretch of new pipe to
replace a leaky area of Line 6A it removed from the ground on
Monday. The line could have been fixed by late Tuesday if
X-rays showed the seams were secure.
INVENTORIES RISE
U.S. crude inventories unexpectedly rose by 3.3 million
barrels in the week to Sept. 10, which included at least one
day of the Enbridge shutdown, as imports increased, the
American Petroleum Institute (API) said on Tuesday. []
The API last week reported that crude stocks had fallen a
massive 7.3 million barrels in the week to Sept. 3 to 354.2
million barrels, but on Tuesday revised the week-ago figure to
358.5 million. Coupled with the latest gain, inventories are
now almost unchanged from two weeks ago.
"The API did some revisions, so in itself it's not such a
bearish report," Lim said. "Distillates and gasoline fell."
Gasoline stocks dropped by 963,000 barrels, versus
forecasts for a 700,000-barrel drop, the API said. Distillates
including heating oil and diesel fell by 1.5 million barrels,
against predictions for a 300,000-barrel gain.
Government data from the Energy Information Administration,
due on Wednesday at 1430 GMT, is expected to show U.S. crude
stocks fell 2.2 million barrels last week. []
This week's inventory reports include data through Sept.
10, the day after a leak forced the shutdown of Enbridge's
670,000 barrel-per-day 6A pipeline, which carries Canadian
crude oil to U.S. refineries in the Midwest and the Cushing
hub.
"Now that Enbridge may be restarting next week, that
situation seems to be over and investors might be shifting
their focus to macroeconomic news," Lim said.
The oil market's attention was also set to turn to U.S.
industrial production data due later on Wednesday.
Japan intervened in foreign exchange markets for the first
time in six years on Wednesday to stem economic damage from the
surging yen, pushing its currency 2 percent lower and boosting
Tokyo stocks. []
A trio of potentially dangerous storms swirled over the
Atlantic Basin on Tuesday as Tropical Storm Karl formed in the
Caribbean on a path that could take it over oil-production
facilities in Mexico's Bay of Campeche. []
(Editing by Clarence Fernandez, Himani Sarkar)
