* Enbridge repairs to Canada-U.S. pipeline completed
* EIA says crude, products inventories fell last week
* Coming up: US jobless claims data, 8:30 a.m. EDT, Thurs
(Recasts, updates prices, market activity, changes byline and
moves dateline from LONDON)
By Robert Gibbons
NEW YORK, Sept 15 (Reuters) - Oil prices fell for a second
day on Wednesday on expectations that a key Canada-U.S. crude
pipeline will reopen soon from a week-long shut-down, although
data showing a drop in U.S. crude stocks limited losses.
Disappointing regional manufacturing data and slower U.S.
industrial production growth, coupled with a dive in the
Japanese yen, added to pressure, pulling oil prices further
down from a one-month high above $78 a barrel hit on Monday.
U.S. crude for October <CLc1> delivery fell $1.20, or 1.56
percent, to $75.60 per barrel at 1:33 p.m. EDT (1733 GMT),
trading from $74.66 to $76.65, with crude's losses concentrated
at the front end of the price curve as traders factored in a
quicker resumption in Canadian exports that would boost
supplies.
In London, the expiring ICE October Brent crude contract
<LCOc1> fell 41 cents to $78.75 a barrel, steepening the
discount for U.S. crude futures to Brent to about $3 a barrel
<CL-LCO1=R>. It had hit less than $1.40 earlier this week on
the pipeline outage.
Canada's Enbridge <ENB.TO>, hit by three oil pipeline
outages since July, said repairs on its U.S.-bound Line 6A
crude pipeline were completed on Tuesday and a senior
government engineer reportedly said the line might be cleared
to restart by the weekend. [] []
"The market driver today is the expectation that Enbridge
(pipeline) will come back online sooner rather than later,"
Olivier Jakob, consultant with Petromatrix, said.
Crude oil inventories in the United States, the world's top
oil consumer, fell 2.49 million barrels in the week to Sept.
10, mostly in line with analysts' forecast, weekly data from
the Energy Information Administration showed. []
Distillate stocks, which include heating oil and diesel
fuel, fell 340,000 barrels, against a forecast for about the
same size build. Gasoline stocks fell 694,000 barrels, in line
with expectations.
"It has been a while since I last saw EIA numbers being
spot on with forecasts," Mike Zarembski, senior commodities
analyst for optionsXpress, said.
"Oil traders are looking outside the numbers today and are
more focused on Enbridge having repaired its 6A pipeline. We
are expecting oil will start to flow into the Midwest again."
The pipeline shutting last Thursday was expected to help
reduce stocks at the Cushing, Oklahoma, hub, delivery point for
U.S. benchmark crude West Texas Intermediate. Cushing stocks
did slip 581,000 barrels last week, according to the EIA.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Graphic on Brent/WTI spread: http://link.reuters.com/vew63p
For yen strength: http://r.reuters.com/puw56n
Crude oil prices in major currencies []
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
The recent U.S. distillate stocks drops have helped push
the U.S. heating oil crack spread -- the profit that refiners
make in processing crude into fuel -- to surge to its highest
level in nearly four months. []
The spread <CL-HO1=R> jumped on Wednesday to a high of
$13.99 a barrel, the highest level since the spread rose to
$14.21 on May 20.
A report showing the New York Federal Reserve's "Empire
State" general business conditions index fell and a separate
report showing U.S. industrial output rose, but at a slower
pace, in August, helped weigh on oil prices before the EIA
data. [] []
Most financial markets were roiled by Japan intervening to
weaken the yen. The dollar rose more than 3 percent against the
yen as Japan intervened to weaken its currency for the first
time in six years, kicking off what could be a sustained effort
to limit yen strength. []
But the dollar was little changed against the euro <EUR=>,
the currency pairing most oil traders focus on. The dollar
index <.DXY>, measuring the greenback against a basket of
currencies, was stronger but in choppy trading.
(Additional reporting by Gene Ramos in New York, Ikuko
Kurahone in London and Alejandro Barbajosa in Singapore;
Editing by Walter Bagley)
