UPDATE 1-Oil dips to $75; U.S. pipeline poised to restart Friday

                                
 * U.S. crude, product inventories dropped last week -EIA
                                
 * Technicals show bear trend towards $74 [ID:nSGE68F00W]
                                
 * Coming Up: U.S. Initial jobless claims; 1230 GMT
 (Adds map and background on Lakehead system, updates prices)
                                
 By Alejandro Barbajosa
                                
 SINGAPORE, Sept 16 (Reuters) - Oil fell for a third day on
Thursday after Enbridge said U.S. regulators have agreed to a
Friday restart of the company's biggest pipeline from Canada, a
move poised to restore crude supplies to refiners in the
Midwest.
                                
 U.S. crude for October <CLc1> fell 1.3 percent to $75 a
barrel at 0602 GMT, having dropped 1 percent on Wednesday. The
contract hit a one-month high above $78 earlier this week on
concerns the Enbridge outage could last until October.
                                
 "It's just unwinding from the expectation that it was going
to be blocked for some time," said Michelle Kwek, an analyst at
Informa Global Markets in Singapore.
                                
 The Pipeline and Hazardous Materials Safety Administration
(PHMSA), which oversees U.S. pipelines, had yet to confirm the
approval after Enbridge Inc <ENB.TO> completed repairs on Line
6A, following a leak in Romeoville, Illinois, that forced the
duct to close nearly a week ago. [ID:nN15154855]
                                
 "We have consulted with PHMSA and agreed to a restart date
of Friday," Enbridge spokeswoman Terri Larson said on
Wednesday.
                                
 Line 6A is the main artery of Enbridge's Lakehead Pipeline
System, the backbone of U.S. oil imports from top supplier
Canada. The line supplies refineries with a combined capacity
of more than 1 million barrels per day (bpd) in the Chicago
area and connects with a spur that reaches a key storage hub in
Cushing, Oklahoma. For a map: http://link.reuters.com/mes92p
                                
 The 670,000-barrel-per-day (bpd) pipeline's Sept. 9
shutdown raised expectations that high inventories at the
Cushing pricing hub for the U.S. crude benchmark West Texas
Intermediate (WTI) would drain, bringing WTI prices more in
line with strong values for European marker Brent.
  <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ 
TAKE A LOOK-Enbridge crude line shut      [ID:nN10265810] 
Factbox on refineries                     [ID:nN13195749] 
Factbox on outage impact                  [ID:nN13190665] 
Factbox on pipelines feeding the Midwest  [ID:nN10275799] 
History of Enbridge's pipeline spills     [ID:nN10254087] 
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
                                
 MARKET SHURGS OFF STOCKDRAWS
                                
 But drops last week in petroleum stockpiles held by the
U.S., the world's top oil consumer, did little to allay surplus
concerns, even as the drawdown may have continued this week
because of the pipeline closure.
                                
 "Maybe stockpiles will be reduced by a little bit, but they
will still have oversupply," Kwek said.
                                
 U.S. crude oil inventories dropped last week by 2.49
million barrels to 357.37 million barrels, in line with
expectations, and product stocks fell, too, according to a
weekly report from the Energy Information Administration on
Wednesday. [EIA/S]
                                
 Crude inventories at Cushing fell 581,000 barrels to 34.95
million barrels.
                                
 Total U.S. distillate stocks including diesel fell 340,000
barrels, against analyst expectations for a 300,000 barrel
gain, while gasoline inventories declined 694,000 barrels, in
line with forecasts.
                                
 ICE Brent crude for November <LCOc1>, the front month after
October's expiry on Wednesday, declined 60 cents to $78.82,
maintaining a hefty premium against front-month WTI.
                                
 "With the latest Norwegian production statistics revealing
a year-on-year fall in output in August of 417,000 barrels per
day, the heaviest fall in any month in more than three years,
combined with relatively low European crude inventories and the
dispersal of floating storage, it is not difficult to find a
set of reasons why the Brent market should be considerably
tighter than that of WTI," Barclays Capital analysts said in a
weekly report.
                                
 In other markets, the yen drifted higher on Thursday, but
the market was on the alert for more intervention by Japanese
authorities, while Asian stocks slipped from a near five-month
high. [MKTS/GLOB]
                                
 Some traders see the likelihood of a fresh round of
intervention increasing if the dollar slips back below 85 yen.
Japan sold an estimated 2 trillion yen ($23 billion) on
Wednesday, a record for a single day, prompting the dollar to
post its largest daily gain against the yen in nearly two
years. [ID:nN15210364]
                                
 Tropical Storm Karl hit Mexico's Yucatan Peninsula on
Wednesday and could reach hurricane strength once it enters the
Gulf of Mexico, where it could swing past major Mexican oil
installations. [ID:nN15145729]
 (Editing by Manash Goswami)