Oil heads for biggest weekly drop in five ahead of pipe restart

                                
 * Enbridge has regulatory approval for Friday pipe restart
                                
 * Technicals show bear trend towards $72.63 [ID:nSGE68G018]
                                
 * Coming Up: Univ. of Michigan consumer sentiment; 1355 GMT
                                
 By Alejandro Barbajosa
                                
 SINGAPORE, Sept 17 (Reuters) - Oil was on Friday headed for
its biggest weekly drop in the last five, erasing gains related
to the eight-day shutdown of Enbridge's largest Canada-U.S.
pipeline, now scheduled to restart in a matter of hours.
                                
 U.S. crude for October <CLc1> was unchanged at $74.57 a
barrel by 0214 GMT. It touched $74.11 on Thursday, the lowest
intraday price since Sept. 9, when a leak forced Enbridge to
halt crude flows through the 670,000-barrel-per-day (bpd) Line
6A, supplying refiners in the U.S. Midwest.
                                
 Prices touched a one-month high of $78.04 earlier this week
on expectations of an extended outage.
                                
 The shutdown raised expectations that high inventories at
the Cushing, Oklahoma, storage and pricing hub for the U.S.
crude benchmark West Texas Intermediate (WTI) would drain,
reducing European marker Brent's current premium to WTI.
                                
 "WTI (is) pressured by the ongoing Cushing bottleneck, and
Brent supported by seasonal maintenance to North Sea
operations, regional supply issues, and stronger global
demand," said JP Morgan oil analysts headed by Lawrence Eagles.
                                
 Enbridge Inc <ENB.TO> has completed repairs and received
regulatory approval to restart the duct on Friday, which
carries up to a third of Canada's U.S.-bound crude shipments,
restoring nearly 5 percent of imports for the world's largest
oil consuming nation. [ID:nN16273120]
                                
 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 serves 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 the key Cushing hub. For
a map: http://link.reuters.com/mes92p
                                
 CUSHING STOCKS RISE
                                
 Crude stored at the Cushing 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.
[ID:nN16178342]
                                
 Genscape estimated that Cushing crude tanks were filled to
72 percent of shell capacity as of Tuesday, unchanged from last
week.
                                
 "We not only believe that Cushing stocks will reach
capacity by the end of October, but that new supply additions
have the potential to keep the forward curve under pressure,
possibly all the way through to the spring 2011 maintenance
program," JP Morgan said.
                                
 Unlike October WTI, the November contract gained 16 cents
to $75.90, trading about $1.35 above the front month. And ICE
Brent for November <LCOc1> rose 21 cents at $78.69, commanding
a premium of almost $2.80 to November WTI. October Brent
expired on Wednesday.
                                
 "At this juncture we are cautious on some of the seasonal
effects which have been driving Brent," JP Morgan said.
                                
 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. [ID:nLDE68F18K]
                                
 Asian equities edged higher on Friday after U.S. stocks
were mildly positive a day earlier, as a mood of uncertainty
about the strength of the global recovery prevailed across
markets. [.T]
                                
 New U.S. claims for jobless benefits hit a two-month low
last week, hinting at some stability in the labor market, while
the contraction in factory activity in the Mid-Atlantic region
slowed in September. [ID:nN16247388]
                                
 The reports on Thursday further reduced the odds of a
double-dip recession and suggested the Federal Reserve may not
need to launch a fresh round of asset purchases to aid the
economic recovery.
                                
 Hurricane Karl formed in the southern Gulf of Mexico on
Thursday and gained strength as it headed across Mexico's
offshore oil patch. [ID:nN16261186]
                                
 Mexican oil monopoly Pemex said on Thursday that is has
halted production at 14 wells in the Gulf of Mexico and
evacuated personnel as Hurricane Karl moves through a key
offshore production area. [ID:nWNA9923]
                                
 Two of Mexico's main oil exporting ports also closed as
Karl passed through the region. [ID:nN16121343]
 (Editing by Manash Goswami)