* Enbridge may restart key line 6A without formal request
* Enbridge restarts smaller Canada-New York pipeline
* Dollar weakens, supportive to crude early
* Coming up: API oil data 4:30 p.m. EDT Tuesday
(Recasts, updates prices, market activity, changes byline and
moves dateline from LONDON)
By Robert Gibbons
NEW YORK, Sept 14 (Reuters) - Oil prices retreated on
Tuesday after Enbridge Inc said it may be able to restart its
key Line 6A pipeline bringing Canadian crude oil to the United
States without submitting a formal request to U.S. regulators
for permission to resume shipments.
An Enbridge <ENB.TO> spokeswoman also said Enbridge had
restarted its 70,000 barrel per day Line 10 crude pipeline from
Ontario to New York state after no leak was found on that line.
The line was shut late Monday on a suspected leak.
[]
Crude prices retreated on Tuesday after being lifted to
just under $78 a barrel by a weak dollar and supportive U.S.
economic data, along with the ongoing Enbridge pipelines
shutdown saga.
U.S. crude for October <CLc1> delivery fell 80 cents, or
1.04 percent, to $76.39 per barrel at 1:59 p.m. EDT (1759 GMT),
trading from $76.21 to $77.99, stalling just below Monday's
intraday peak of $78.04 -- the highest front-month price since
Aug. 11.
U.S. oil prices had surged Monday on the ongoing shutdown
of Calgary-based Enbridge's 670,000 barrel per day Line 6A, the
biggest Canada-U.S. pipeline. []
On Tuesday, ICE October Brent crude <LCOc1> fell 22 cents
to $78.81 a barrel, also reversing on the Enbridge news.
"The news that the Enbridge pipeline will restart soon had
a lot to do with the downward momentum in crude oil futures,"
said Phil Flynn, analyst at PFGBest Research in Chicago.
"People appeared to have over reacted to the situation,
fearing that the shutdown would last for a week. And so crude
became overpriced, and now the market is adjusting lower."
Enbridge shutting the crude oil pipeline in New York state
on Monday followed last week's leak in Illinois that shut the
key Line 6A line that brings Canadian crude to U.S. Midwest
refineries and the crucial Cushing, Oklahoma, oil hub.
The Line 6A leak occurred just six weeks after Enbridge's
Line 6B pipeline ruptured in Michigan. Line 6B also remained
shut, awaiting regulatory approval to restart.
WEAK DOLLAR
Trading sources earlier on Tuesday cited the weak dollar as
helping crude prices bounce.
The dollar slid to a 15-year low against the yen after
Japan's prime minister won a leadership vote and the euro hit a
one-month peak against the greenback after piercing a key
technical level. The dollar index <.DXY> also weakened. []
The Chinese yuan closed higher after hitting a fresh
post-revaluation peak against the dollar. Beijing was seen
conceding to let the yuan rise as U.S. lawmakers called for a
vote on a bill to get tough with China over its slow exchange
rate reform. []
Oil prices also found early support from figures showing
higher-than-expected U.S. retail sales in August and a second
government report that said business inventories increased in
July at double the expectation as sales rebounded strongly.
[]
Gold hit record highs above $1,270 an ounce on Tuesday in
its biggest one-day rally in four months, as the U.S. dollar
declined broadly after the upbeat data failed to convince
investors to shift into risk-linked assets. []
INVENTORIES
Traders also eyed a low-pressure system in the Caribbean
Sea that was given a 70 percent chance of developing into a
tropical depression [] and awaited weekly
inventory reports from industry and government that were
expected to show U.S. crude stocks fell last week.
Industry group American Petroleum Institute will release
its inventory report on Tuesday at 4:30 p.m. EDT (2030 GMT).
The U.S. Energy Information Administration's report is due on
Wednesday at 10:30 a.m. EDT (1430 GMT).
(Additional reporting by Gene Ramos in New York, David Turner
in London and Alejandro Barbajosa in Singapore; Editing by
Walter Bagley)
