* Oil lifted by major oil line outage between US-Canada
* Crude sees biggest percentage gain in five weeks
* IEA trims 2011 oil demand growth forecast by 50,000 bpd
(Adds details, settlement prices)
By David Sheppard
NEW YORK, Sept 10 (Reuters) - U.S. crude rose 3 percent to
hit a four-week high above $76 a barrel on Friday following the
shutdown of a major pipeline supplying Canadian oil to the
United States and potential for an extended outage.
The gain came despite the International Energy Agency
saying that world oil demand would remain tepid.
[]
The U.S. crude contract for delivery in October <CLc1> rose
to a peak of $76.73 a barrel, the highest level since
mid-August, after Enbridge Inc <ENB.TO> said pipeline 6A
remained shut as the cleanup of an oil leak continued near
Romeoville, Illinois. []
"Since markets dislike uncertainty, they will usually
discount a worst-case situation until some clarity is
forthcoming," Jim Ritterbusch, president at Ritterbusch &
Associates in Galena, Illinois, said in a research note.
"In this particular case, the line will not only need to be
repaired but regulatory approval will reportedly be required
before shipments on the line are restarted."
The front-month contract settled on Friday at $76.45, up
$2.20, its biggest percentage gain in five weeks. Oil reversed
losses earlier this week to close up by 2.5 percent from last
Friday.
Trading volume was the highest since May with over 1
million contracts changing hands.
The November contract <CLc2> closed up $1.58 at $77.37 a
barrel.
In contrast, Brent crude oil <LCOc1> in London was up just
69 cents a barrel at $78.16, with concerns about the strength
of global demand still weighing.
The IEA said global oil consumption growth was expected to
increase a little this year but slip in 2011 and that fuel
consumption could be much weaker if the world economy slows.
[]
The agency, which advises major industrial countries on
energy policy, said global oil supply was more than sufficient
to meet demand, highlighting high levels of industry stocks
across the developed world.
PIPELINE OUTAGE
The shutdown of Enbridge's pipeline began pushing up crude
futures prices on the New York Mercantile Exchange near the end
of electronic trading on Thursday and saw a narrowing of
Brent's premium to U.S. benchmark <CL-LC01=R>.
Enbridge 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. The duct accounts for 7 to 8
percent of total U.S. crude imports. (Graphic:
http://link.reuters.com/qyz52p)
Canada shipped 1.75 million bpd to the United States in the
week to Sept. 3, making it by far the largest foreign supplier.
Saudi Arabia, the No. 2 supplier, shipped 1.16 million bpd to
U.S. markets last week, according to data from the U.S. Energy
Information Administration.
Six weeks ago, 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 following heightened
scrutiny because of BP Plc's <BP.L> Gulf of Mexico spill.
Record stockpiles in the United States have this month
depressed the price of U.S. benchmark crude relative to
European Brent.
The Enbridge pipeline shutdown might help ease a glut at
Cushing, Oklahoma -- the pricing point for the main U.S. crude
oil contract -- which is chiefly supplied these days with
Canadian oil.
Brent posted its biggest premium to U.S. crude since
mid-May earlier this week at more than $3.50 a barrel,
shrinking on Friday to just under $2.
"We don't know the timeline for when the leak is likely to
be fixed. We're likely to see more draws in Cushing than was
previously expected," Amrita Sen of Barclays Capital said.
(Additional reporting by Gene Ramos in New York, Marie-Louise
Gumuchian in London and Alejandro Barbajosa in Singapore;
Editing by Lisa Shumaker)
