* Front-month WTI discount shrinks against second month
* Enbridge leak size, shutdown duration still unclear
* Coming Up: U.S. Wholesale inventories July; 1400 GMT
By Alejandro Barbajosa
SINGAPORE, Sept 10 (Reuters) - U.S. crude for October
jumped to near $75 after a leak forced Enbridge to shut down
the biggest pipeline supplying Canadian oil to refineries in
the Midwest.
Enbridge Inc closed its 670,000 barrel per day (bpd) Line
6A, the largest of the company's major three, after a leak was
discovered near Romeoville, Illinois. []
Front-month U.S. crude for delivery in October <CLc1>
jumped 60 cents to $74.85 a barrel at 0205 GMT, while the
November contract added just 4 cents to $75.83.
Contracts further out fell after a Thursday government
report showed total U.S. petroleum inventories climbed to a
fresh all-time high on a weekly basis. Record stockpiles at the
world's largest oil-consuming nation have this month depressed
the price of U.S. crude relative to European Brent <LCOc1>.
But the shutdown of the Enbridge pipeline might help ease a
glut at the Cushing, Oklahoma, pricing point, majorly supplied
with Canadian oil. That was reflected on Friday by the
reduction of an unusual premium of October ICE Brent, which
fell 32 cents to $77.15, over the U.S. benchmark West Texas
Intermediate (WTI).
"Some people had been selling WTI and buying Brent crude,
but now they are covering their shorts, and thereby they have
to buy back WTI at the front of the curve," said Tetsu Emori, a
fund manager at Tokyo-based Astmax Co Ltd.
"As soon as there are signs of continued recovery from U.S.
economic data or that oil inventories are falling, it should
have a good impact on crude prices."
Asian equities on Friday tracked Wall Street higher after
stronger-than-expected U.S. data on jobless benefits and trade
on Thursday raised hopes the tepid economic recovery would
accelerate. [] []
Despite the increase in overall U.S. petroleum inventories
last week, crude stockpiles dropped 1.85 million barrels to
359.9 million in the week to Sept. 3 as imports declined and
refineries processed more crude, the Energy Information
Administration reported on Thursday. []
Inventories at the key Cushing hub fell by 218,000 barrels
to 35.54 million barrels.
The spread, or the discount of front-month WTI crude to the
second month, shrank to about $1.10 on the Enbridge news from
almost $1.80 a barrel earlier this week, flattening a market
structure known as contango, where prompt oil is cheaper than
future supplies.
Though the size of the spill is not yet known, local fire
officials said the line was shut early in the afternoon and
that the oil has been contained.
Line 6A, which carries light, medium and heavy crudes, as
well as synthetic oil from northern Alberta's oil sands, runs
from Superior, Wisconsin, to Griffiths and supplies oil to
refineries in the Chicago region, as well as to the storage hub
at Cushing.
Thursday's incident comes just six weeks after Enbridge was
forced to shut down another smaller part of its Lakehead
system, which the U.S. government has not yet allowed to resume
operations amid heightened scrutiny of spills after BP Plc's
<BP.L> massive Gulf of Mexico spill.
U.S. distillate stocks fell 388,000 barrels, according to
the EIA, against analyst expectations for a 600,000 barrel
rise, while stocks of gasoline fell 243,000 barrels compared
with forecasts for a larger draw of 900,000 barrels.
Storms are expected to shut in about 20 million more
barrels of U.S. crude oil production in the Gulf of Mexico
before the hurricane season ends on Nov. 30, the Energy
Information Administration said Thursday. []
(Editing by Manash Goswami)
