LONDON - Just when tightening oil supplies across the world looked ready to experience some relief, with OPEC ministers to meet next week potentially to raise production, a pipeline explosion in the United States has cut critical supplies from Canada and sparked a jump in prices on Thursday.
Canadian company Enbridge (nyse: ENB - news - people ) has shut down four pipelines carrying crude oil to the United States after an explosion on Wednesday afternoon claimed the lives of two workers. The pipeline blast took place three miles from a terminal in Clearbrook, Minnesota, and the shutdown has effectively corked 1.7 million barrels' worth of oil per day.
The supply shock sparked a boost in oil futures. West Texas Intermediate for January delivery gained $3.63, or 4.0%, to $94.25 per barrel, while Brent crude for January delivery advanced $2.06, or 2.3%, to $91.87 per barrel, on the ICE futures exchange.
"This pipeline blast has caused a little bit of consternation simply because it is such an important pipeline," said Lawrence Poole, energy analyst with Global Insight. He said the affected lines contributed 20% of America's import requirement, adding: "In the short term, there is no doubt that it is going to add some pressure to oil futures."
Above story by Lionel Laurent,for more, go here.
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