Oil Is Little Changed as Enbridge Reopens Pipelines After Blast

Nov. 30 -- Crude oil was little changed near $91 a barrel in New York as Enbridge Inc. resumed supplies through the biggest pipeline from Canada to the U.S.
Futures pared gains of as much as $4.55 a barrel yesterday after the company said operations will return to normal within three days following a Nov. 28 explosion that shut three of four pipelines. Oil is set for its biggest weekly decline in 10 months on speculation the Organization of Petroleum Exporting Countries may raise output at a meeting in Abu Dhabi next week.
``Once everyone realized it wasn't as bad as people thought, traders took profits and got out and the market flattened out,'' said David Aleman, a senior analyst at Grand Central Trading Co. in Newport Beach, California. Any OPEC output ``increase will be relatively small especially now that the market has pulled back.''
Crude oil for January delivery was at $90.88 a barrel, down 13 cents, in after-hours electronic trading on the New York Mercantile Exchange at 12:59 p.m. in Singapore.
Yesterday the contract rose 39 cents, or 0.4 percent, to close at $91.01. Futures are up 44 percent from a year ago.
The Enbridge pipeline blast killed two workers and cut shipments that average 1.5 million barrels a day. The pipelines transport oil to U.S. refiners, including BP Plc's plant in Whiting, Indiana, and facilities along the Gulf Coast. The U.S. imported 10.3 million barrels a day last week.
``Early reports suggest the disruptions aren't as large as previously thought and that it should be only short-lived,'' said Mark Pervan, senior commodity strategist at Australia & New Zealand Banking Group Ltd. in Melbourne. ``The downward trend is probably still in place until we get the OPEC meeting out of the way.''
`Reaching Out'
The U.S. Energy Department said it's ``reaching out'' to Midwestern refiners and that oil from the U.S. Strategic Petroleum Reserve ``is available to alleviate a severe supply disruption,'' spokeswoman Megan Barnett said yesterday. She declined to say whether the department has received any requests to tap the reserve.
ConocoPhillips's 306,000 barrel-a-day Wood River refinery in Illinois and Western Refining Inc.'s facilities won't be affected, the companies said yesterday. Exxon Mobil Corp. said it will tap crude oil storage to ensure uninterrupted supplies to refineries. Sinclair Oil Corp. said its supply is adequate for now, though it does buy oil from Canada.
Oil has declined 7.4 percent this week, the biggest since Jan. 5, driven by signs that OPEC is raising production and may increase output further. Crude touched a record $99.29 a barrel in New York on Nov. 21.
OPEC Shipments
OPEC's daily shipments of oil will rise 2 percent in the four weeks to Dec. 15 from the previous month, according to consulting company Oil Movements. OPEC promised to raise output by 500,000 barrels a day starting Nov. 1.
Brent crude oil for January settlement was at $90.06 a barrel, down 16 cents, on the London-based ICE Futures Europe exchange at 1:03 p.m. Singapore time. The contract yesterday climbed 41 cents, or 0.5 percent, to $90.22.