* Enbridge Line 6A pipeline expected to restart on Friday
* Mixed U.S. economic data spurs negative sentiment
* Hurricane Karl seen sparing Mexico oil patch
* Coming Up: U.S. August CPI inflation Friday
(Updates with Brent crude settlement, Brent premium over WTI,
paragraph 6)
By Gene Ramos
NEW YORK, Sept 16 (Reuters) - Oil prices fell nearly 2
percent on Thursday, sliding for a third day, as U.S. Midwest
supply anxieties eased further on news that a major Canadian
pipeline carrying crude to the region would be back in service
by Friday.
Prices were also pressured by mixed U.S. data showing
weekly jobless benefit claims eased slightly and mid-Atlantic
factory activity contracted more slowly, further reducing the
chances of a feared double-dip recession, but confirming that
the economy remained on a slow growth path. []
U.S. benchmark crude futures for October delivery <CLc1>
settled down $1.45 at $74.57 a barrel, after earlier dropping
to a session low of $74.11.
Oil prices have now completely erased their surge to as
high as $78.04 on Monday, following the closure of Enbridge
Inc's 670,00-barrels-per-day Canada-U.S. crude oil pipeline
last Thursday after a leak, halting up to a third of Canada's
crude exports to the United States.
The line was set to resume operation on Friday after the
company completed repairs and received regulatory clearance,
Enbridge said.
In London, European benchmark ICE Brent crude for November
delivery <LCOc1> settled down 94 cents at $74.48 a barrel,
lowering its premium over the U.S. benchmark crude to $2.74.
[].
Oil prices fell back as traders unwound bets that the
pipeline outage would drain inventories in the Midwest, and
particularly in the key storage hub in Cushing, Oklahoma.
However, the latest data showed that crude stored at the
hub rose by 93,496 barrels to 37.66 million barrels in the week
to Sept. 14, according to a report from industry data provider
Genscape on Thursday.
The U.S. Energy Information Administration's data on
Wednesday showed that stocks at that delivery point fell
581,000 barrels to 34.95 million barrels in the week to Sept.
10. []
"With the return of the Enbridge line shut last week now
imminent, the crude oil market is looking at external financial
markets, where there is negative economic sentiment today,"
said Gene McGillian, an analyst at Tradition Energy, in
Stamford, Connecticut.
"That's the feeling, even though the weekly jobless claims
dropped, but not too much," Mcgillian said.
Meanwhile, weather worries were easing.
Karl strengthened and became a Category 1 hurricane in the
southern Gulf of Mexico on Thursday as it headed for the coast
of eastern Mexico, but none of the country's dozens of offshore
oil platforms reported damage due to Karl's passage, state oil
firm Pemex said on Thursday.
Nonetheless, Mexico closed two of its three main oil export
ports in the gulf, guarding against rough weather.
U.S. STOCKPILES DOWN, SUPPLIES STILL HIGH
Wednesday's U.S. government data showing crude and product
inventories all fell last week did little to ease worries over
a surplus of crude oil.
Total U.S. commercial crude and product inventories fell by
just 2.9 million barrels to just above 1.14 billion barrels in
the week to Sept. 10, easing from their highest weekly level
since 1990, when the government began issuing weekly reports.
In Europe, suplies 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 those stocks
are 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 bpd, up from 1.836
million bpd planned in September.
(Additional reporting by Robert Gibbons in New York;
Christopher Johnson in London; Alejandro Barbajosa in
Singapore; Editing by Walter Bagley)
