UPDATE 7-Oil dips towards $75 ahead of U.S. pipeline restart

                                
 * N.American Enbridge pipeline expected to restart on Friday
                                
 * Technicals show bear trend towards $74 [ID:nSGE68F00W]
                                
 * Coming Up: U.S. CPI inflation (August) - 1230 GMT Friday
 
                                
(Updates prices)
                                
 By Christopher Johnson
                                
 LONDON, Sept 16 (Reuters) - Oil fell for a third day on
Thursday ahead of the expected reopening of a North American
pipeline that will restore crude supplies to U.S. refiners.
                                
 U.S. regulators will allow the 670,000-barrel-per-day (bpd)
Enbridge pipeline, which carries oil from Canada to the American
heartland, to resume operation on Friday following repairs after
a one-week closure, pipeline company Enbridge Inc <ENB.TO> said.
[ID:nN15154855]
                                
 U.S. crude futures for October <CLc1>, also known as WTI,
fell below $75 a barrel before recovering to around $75.32 a
barrel by 1407 GMT. That level was still 70 cents lower than
Wendsday's close. The contract hit a one-month high above $78 on
Monday on concerns over the Enbridge outage.
                                
 European benchmark Brent crude futures <LGOc1> were trading
9 cents higher at $79.51 a barrel.
                                
 The reopening of the pipeline will remove a major support
for prices, which some traders predicted could now slip lower.
                                
 "WTI will have to find something new to retest the recent
highs at $78 per barrel," said Olivier Jakob, managing director
of consultants Petromatrix in Zug, Switzerland.
                                
 Edward Meir, senior commodity analyst at brokers MF Global,
said the risk of hurricanes in the Gulf of Mexico could provide
some support for a while, but this threat would soon disappear.
                                
 "For the time being, WTI prices should continue trading
within the $70-$80 range, but as we exit the hurricane season,
defending downside support at $70 will become an increasingly
difficult proposition," Meir said.
                                
 The Pipeline and Hazardous Materials Safety Administration
(PHMSA), which oversees U.S. pipelines, has yet to confirm when
the Enbridge pipeline will restart.
                                
 The pipeline affected, 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 feeds 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.
                                
 The pipeline's Sept. 9 shutdown raised expectations that
high inventories at Cushing would start to drain, bringing WTI
more in line with strong values for European marker Brent.
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 TAKE A LOOK-Enbridge crude line shut      [ID:nN10265810]
                                
  For a map: http://link.reuters.com/mes92p
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 MARKET SHRUGS OFF STOCKDRAWS
                                
 But drops last week in petroleum stockpiles held by the
United States, the world's top oil consumer, did little to ease
worries over a surplus of crude oil.
                                
 U.S. crude oil inventories fell last week by 2.49 million
barrels to 357.37 million barrels, in line with expectations,
and product stocks fell, according to a weekly report from the
Energy Information Administration on Wednesday. [EIA/S]
                                
 U.S. distillate stocks including diesel fell 340,000
barrels, against analyst expectations for a 300,000 barrel gain,
while gasoline stocks fell 694,000 barrels, as expected.
                                
 ICE Brent crude for November <LCOc1>, the front month after
October's expiry on Wednesday, declined just 19 cents to $79.23
by 1243 GMT, maintaining a big premium over WTI.
                                
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 For a graphic showing the premium for Brent crude over WTI,
                                
 click: http://link.reuters.com/vaj93p
                                
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 Supplies of crude from the North Sea have been restricted
since mid-summer due to maintenance work, helping support Brent
prices relative to U.S. crude, but is now rising gradually.
                                
 Crude oil output from nine of the main North Sea streams
will increase by 9.9 percent in October, according to data
compiled by Reuters on Thursday from trading sources. Output in
October is set to average 2.017 million barrels per day (bpd),
up from 1.836 million bpd planned in September. [ID:nLDE67G19R]
                                
 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]
 (Additional reporting by Alejandro Barbajosa; editing by
William Hardy)