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Oil rallies as Canadian pipeline blaze sparks supply concerns Thomson
Financial delivered by Newstex Oil rose after an explosion and fire on a crude oil pipeline from Canada to the US sparked supply concerns. Enbridge Inc (TSX:ENB.A) (NYSE:ENB) (TSX:ENB) , which owns and operates a network of pipelines in Canada and the US, said late yesterday the accident in the northern state of Minnesota forced the company to shut down four pipelines. Enbridge's crude oil pipeline system serves major refineries in Canada's Ontario province as well as the Great Lakes region of the US, delivering about 2.2 mln barrels per day (bpd). 'News of an explosion at the Enbridge Minnesota terminal will resurrect supply concerns,' said Bank of Ireland analyst Paul Harris. 'Furthermore, arrests in Saudi Arabia of over 200 terror suspects over a planned attack on an oil facility will serve to heighten geopolitical concerns,' he said.
Sempra Metals analyst John Kemp said while 600,000 bpd might be restored in a day or so from the pipeline, 1.8 mln bdp, or 18 pct of daily US imports, are now unavailable indefinitely. He said there is no way to replace the import capacity and the market was awaiting an announcement from the US government as to whether it will release oil from the Strategic Petroleum Reserve (SPR). At 10.25 am, New York WTI crude for January delivery was up 3.98 usd at 94.60 usd a barrel. Meanwhile, Brent crude for January delivery was trading up 2.56 usd at 92.37 usd a barrel. According to reports, one of the cells arrested by Saudi Arabia, the world's largest crude producer, was planning to attack an oil facility.
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