UPDATE 7-Oil slips a second day on pipeline restart view

                                
 * Repairs to Enbridge's 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
 (Updates with settlement prices, market activity)
                                
 By Robert Gibbons
                                
 NEW YORK, Sept 15 (Reuters) - Oil prices fell a second
consecutive day on Wednesday on expectations that a key
Canada-U.S. crude pipeline will resume after a week-long
interruption, although government 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, also pressured, extending oil prices' retreat
from a one-month high above $78 a barrel reached on Monday.
                                
 U.S. crude for October <CLc1> delivery fell 78 cents, or
1.02 percent, to settle at $76.02 per barrel, 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, expiring ICE October Brent crude <LCOc1> fell 25
cents to settle at $78.91 a barrel, leaving the discount for
U.S. crude futures to Brent near $3 a barrel <CL-LCO1=R>. It
fell to less than $1.40 earlier this week on expectations the
shut pipeline might help drain high inventories.
                                
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 but that it would be
up to the U.S. Department of Transportation whether 6A could be
restarted by the end of the week. [ID:nNYL002046]
[ID:nN15154855]
                                
 The Department of Transportation's Pipeline and Hazardous
Materials Safety Administration said Wednesday it had not set a
date to resume flows along Line 6A and that the restart of any
pipeline required a "comprehensive review." [ID:nN15175370]
                                
 "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. [EIA/S]
                                
 U.S. 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.
                                
 The Enbridge 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, the EIA said.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
 Graphic on Brent/WTI spread: http://link.reuters.com/vew63p
 For yen strength:            http://r.reuters.com/puw56n
 Crude oil prices in major currencies [ID:nLDE68E11E]
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>  
                                
 Along with some recent unseasonal dips in U.S. distillate
stocks, refinery maintenance [REF/E] and strong diesel cargo
prices [ID:nLDE68E280] in Europe 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. [ID:nN15175496]
                                
 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 stout European gas oil trade is still providing support
(to heating oil crack spreads) as has some relatively favorable
demand indications out of the past couple of EIA weekly
releases," Jim Ritterbusch, president at Ritterbusch &
Associates in Galena, Illinois, said in a research note.
                                
 Most financial markets were roiled by Japan's intervening
to weaken its currency for the first time in six years. The
dollar rose more than 3 percent against the yen, but analysts
said it was uncertain the intervention would depress the
currency for long. [USD/]
                                
 But the dollar seesawed and 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)