* Front-month WTI discount shrinks against second month
* Enbridge leak size, shutdown duration still unclear
* China's August crude oil imports rise 13 pct
* Coming Up: U.S. Wholesale inventories July; 1400 GMT
(Adds graphic on WTI spreads, China imports data)
By Alejandro Barbajosa
SINGAPORE, Sept 10 (Reuters) - U.S. crude for October
jumped to near $75 on Friday after a leak forced Enbridge to
shut down the biggest pipeline supplying Canadian oil to
refineries in the Midwest and to a key storage hub in Oklahoma.
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. The duct accounts for
between 7-8 percent of total U.S. crude imports.
[]
Front-month U.S. crude for delivery in October <CLc1>
jumped as much as 1 percent to $74.97 and was up 50 cents at
$74.75 a barrel at 0407 GMT, while the November contract added
just 1 cent to $75.80.
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>.
"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.
Still, 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 38 cents to $77.09, over the U.S. benchmark West Texas
Intermediate (WTI).
Canada is the largest oil exporter to the U.S. and
Enbridge's pipelines carry the lion's share of that crude.
BRENT PREMIUM SHRINKS
Brent posted its biggest premium to WTI since mid-May
earlier this week at more than $3.50 a barrel, shrinking on
Friday to about $2.35.
"As soon as there are signs of a continued recovery from
U.S. economic data or that oil inventories are falling, it
should have a good impact on (U.S.) crude prices," Emori said.
Asian stocks rose to a four-month high on Friday as some
investors were inspired by positive U.S. and Japanese economic
data to pick out bargains, with the shift to riskier assets
weighing on the yen. [] []
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. []
"A decrease in crude inventories is psychologically a
supportive factor," Emori said.
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 $1.05 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. For a graphic:
http://graphics.thomsonreuters.com/AS/0810/NT_20101009102846.jpg
Though the size of the Enbridge spill or the duration of
the outage are not yet known, 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> Gulf of Mexico spill.
U.S. distillate stocks fell 388,000 barrels last week,
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 cause losses of about 20 million
more barrels of U.S. crude oil production in the Gulf of Mexico
before the Atlantic hurricane season ends on Nov. 30, the
Energy Information Administration said Thursday. []
Oil imports by China, the world's second-largest petroleum
user, rose 13 percent in August from a year earlier. China
brought in 20.9 million tonnes of crude from abroad last month,
and imports for the first eight months gained 22.6 percent to
157.87 million tonnes, the General Administration of Customs
said on its website. []
China's National Bureau of Statistics will release its
monthly suite of economic data including industrial production,
consumer and producer prices and retail sales on Saturday,
Sept. 11, at 0200 GMT. []
(Editing by Manash Goswami)
