UPDATE 1-Enbridge to introduce steps to boost crude flow to Cushing
(Adds details on crude stocks, Enbridge pipelines to Cushing)
NEW YORK, Sept 26 (Reuters) - Limited crude supplies at Cushing, Oklahoma, have prompted pipeline company Enbridge Inc to implement new steps to increase the flow into the storage hub and delivery point for U.S. crude oil futures.
Enbridge will begin implementing a "feeder verification procedure" in October, according to the company's Sept. 25 letter to customers obtained by Reuters.
The new program comes as crude stocks in Cushing have fallen near to minimum operating capacity since August, with supplies inching to just over 20 million barrels last week or a quarter of operating capacity, data from the U.S. Energy Information Administration showed.
Stockpiles have been draining in recent weeks because of the premium paid for that oil in the U.S. Gulf Coast, causing an alarm among traders over enough oil in Cushing.
Under the program, Enbridge said it will provide all feeders and connecting carriers an accurate and predictable delivery schedule at least one business day prior to the start of each business month. The plan appears to ensure that nominations are delivered on time and penalize shippers that fall behind schedule.
Traders are usually able to cover short positions after the expiration of the front-month, light-crude contract by buying the West Texas Intermediate cash roll during the three days of roll trading.
Instead, the program appears to make it more difficult to be short WTI at Enbridge's lines connecting into Cushing, the delivery point for the U.S. crude contract, according to traders familiar with the plans.
Enbridge runs a number of pipelines into Cushing, including the 190,000 barrel-per-day Spearhead line from Flanagan, Illinois. The highly-anticipated 600,000 bpd Flanagan South pipeline has issued its linefill tariffs effective Oct. 14. Continued...