WTI oil surges 3 percent as major US oil pipline shuts

11 September 2010 11 September 2010

BonTrade

WTI oil futures surged around 3 percent higher in trading on Friday and are now back over the $76 mark as an oil leak prompted a major US oil pipline to shut down, and oil traders covered positions in WTI oil.

US Light crude oil futures for October 2010 delivery closed the week at $76.56 a barrel on the NYMEX, around $2 higher than last week’s closing price of $74.60 a barrel.

Oil prices jumped more than $2 yesterday after an oil leak prompted US firm Enbridge to shut down the export pipeline, which carries crude from Alberta to the US Midwest.

Enbridge did not immediately confirm the size or the magnitude of the latest oil leak, but said the line was shipping about 459,000 barrels per day when the oil spill was reported.

Although Enbridge officials claimed that the leak was stopped “within minutes” of being detected around noon local time on Thursday, the US government’s Environmental Protection Agency (EPA) said oil continued to leak as of Friday afternoon.

“It’s a big number, it’s a lot of the system. There’s really no easy way to replace those oil volumes to the Chicago area.” said Chad Friess, an oil and gas analyst with UBS Securities.

Meanwhile, the IEA, in its monthly oil market report released yesterday as revised up its prediction for global crude oil demand for 2010 by 50,000 barrels per day.