BLBG: Oil Falls for First Day in Three as Enbridge Works on Pipeline
By Grant Smith
Sept. 14 (Bloomberg) -- Oil declined for the first time in three days in New York as Enbridge Energy Partners LP prepared to repair a section of pipeline shut last week.
Oil dropped from near a one-month high as the dollar strengthened against the euro, curbing investor demand for crude as an inflation hedge. OPEC Secretary General Abdalla El-Badri said prices of $70 to $80 a barrel are comfortable for oil producers and for consumers.
“The oil market has been on the up now for about two weeks and is getting towards the upper end of the range,” said Christopher Bellew, senior broker at Bache Commodities Ltd. in London. “If the support from equities, storms and the Enbridge pipeline is pulled away, prices will be vulnerable.”
Crude for October delivery fell as much as 66 cents, or 0.9 percent, to $76.53 a barrel in electronic trading on the New York Mercantile Exchange and was at $76.56 as of 10:50 a.m. London time. Brent crude for October settlement, which expires tomorrow, was down 55 cents at $78.48 a barrel on the ICE Futures Europe exchange in London.
The Organization of Petroleum Exporting Countries’ low level of compliance with agreed output cuts is not affecting prices, Secretary General el-Badri said. Compliance is at 53 percent of agreed limits, he said in an interview on Bloomberg Television’s “The Pulse” with Andrea Catherwood today.
“If the situation stays as it is, then $70-$80, this price is comfortable,” el-Badri said in Vienna.
The dollar gained 0.4 percent to trade at $1.2832 a euro as of 10:52 a.m. London time.
Canada Imports
Futures jumped 3 percent on Sept. 10, a day after a leak closed Enbridge’s Line 6A pipe, which transports 670,000 barrels a day of Canadian crude to refineries in the central U.S.
Canada is the largest exporter of crude to the U.S., sending 2.2 million barrels a day in June, according to the Energy Department. Refiners in the region may obtain supplies from Cushing, Oklahoma, the Midwest oil-storage hub, driving up futures traded in New York.
U.S. crude inventories declined 2.5 million barrels, or 0.7 percent, in the seven days ended Sept. 10 from 359.9 million a week earlier, according to a Bloomberg survey before an Energy Department report tomorrow.
Gasoline stockpiles probably fell 650,000 barrels, based on the median estimate from 10 analysts surveyed by Bloomberg News. Distillate supplies, including heating oil and diesel, probably climbed 400,000 barrels.
The industry-funded American Petroleum Institute will release its own report on supply and demand today.
To contact the reporters on this story: Grant Smith in London at gsmith52@bloomberg.net
