HOUSTON (Reuters) - Enbridge’s Line 6A pipeline carrying Canadian crude oil to U.S. refineries and a crucial oil hub in Cushing, Oklahoma, remained shut on Monday, sending crude oil prices to their highest levels in a month.
No date has been set for restarting the pipeline, which was shut Thursday as oil was bubbling up through the soil in a industrial section of Romeoville, Illinois, about 30 miles from downtown Chicago.
In early trade on the New York Mercantile Exchange, U.S. crude oil for October delivery climbed $1.59 to $78.04, its highest level since August 11, due in part to the Line 6A shutdown. Prices later fell back, with October crude trading up $1.30 at $77.75 a barrel.
“The petroleum markets were trading higher in early going Monday, with support coming from a stronger equity market, a weaker U.S. dollar, and ongoing concerns regarding the Enbridge pipeline outage as there were still no estimates on how long the disruption of Midwest crude oil deliveries will last,” Citigroup analyst Tim Evans said in a research note.
Workers were preparing to cut out the problem section of the pipeline and replace it.
The suspension of crude shipments on the 6A line has the potential to reduce flows to Cushing, the delivery point for NYMEX crude, by around 300,000 barrels per day, according to JP Morgan oil analysts headed by Lawrence Eagles, taking into account the potential to pump crude via alternative routes.
Increased environmental scrutiny of the pipeline and its repairs could also delay the restart of Line 6A’s flow, JP Morgan said.
“Such leaks are not unusual, and in normal circumstances we would expect the line to be up and running in a matter of days, but a rapid restart of the most recently shuttered pipeline is unlikely because of a ‘lengthy’ environmental review process,” JP Morgan said.
Enbridge was scrambling to find different ways to deliver the crude to at least the U.S. midcontinent refineries that rely on Line 6A for part of their crude oil supply.
“Enbridge’s schedulers are working with shippers to divert crude oil volumes to other available pipelines and storage facilities,” the company said early Monday.
As many as 450 workers were expected to be working on the site sometime Monday, according to the U.S. Environmental Protection Agency, which is overseeing the clean-up.
Enbridge must cut out a section of pipe where a 1-inch (30 millimeter) hole developed. That section must be repaired and replaced before the flow of oil may resume.
The hole allowed more than 6,000 barrels of oil to leak into the ground.
By midnight, vacuum trucks had sucked up the remaining crude in the shut section of pipe, loose oil on and in the ground and about 6,000 barrels of water contaminated by the oil.
Additional reporting by Gene Ramos in New York; Editing by Walter Bagley