Oil prices fall on pipeline repairs, weak data in US

15th September 2010, Comments 0 comments

Oil prices dropped on Wednesday following news that repairs to a key pipeline from Canada to the United States were almost complete, analysts said.

The market was also lower as top oil consumer the United States posted weak manufacturing figures but this was partly offset by figures showing that US crude oil inventories dropped last week.

New York's main contract, light sweet crude for delivery in October, shed 1.28 dollars to 75.52 dollars a barrel.

Brent North Sea crude for October lost 42 cents to 78.74 dollars in late London trade.

"The fall in oil prices came after Enbridge said that repairs to its key Line 6A Canadian-US pipeline were nearly complete," the Commonwealth Bank of Australia said in a note to clients.

Enbridge has already submitted a restart plan to authorities, with an official saying that the line "should be up and running in some form or fashion by the end of the week," according to media reports.

Line 6A carries 670,000 barrels of crude and light synthetics per day, accounting for one third of Canada's oil exports to the United States.

The closure of the line last Thursday supported prices over the past several days.

On Wednesday, the US Department of Energy said that crude inventories fell by 2.5 million barrels last week, in line with analyst expectations.

Elsewhere, weaker-than-expected US manufacturing data rekindled concerns over the recovery of the world's largest economy.

Industrial production rose a modest 0.2 percent in August, a significantly slower pace than the 0.6 percent rise in July and slightly less than expected by analysts.


© 2010 AFP

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