May 10, 2016 / 4:26 PM / 2 years ago

UPDATE 1-U.S. pipeline to double oil volume as wildfire cuts Canada supply -sources

(Updates with background on wildfire, pipeline)

NEW YORK, May 10 (Reuters) - Crude oil moving from the U.S. Gulf to the Midwest through the country’s largest pipeline is expected to double in volume in May on increased shipper demand, two sources familiar with the matter said on Tuesday, after a wildfire severely reduced Canadian supply.

The 1.2 million barrel per day Capline pipeline, which moves crude from St. James, Louisiana, to Patoka, Illinois, is expected to run as much as 600,000 bpd this month, up from the 300,000 bpd to 350,000 bpd expected previously, the sources said.

The blaze at the center of Canada’s oil sands region started on May 1 and has since reduced a little more than 1 million bpd from producers and pipeline operators that have shut facilities as precaution, impacting oil sand supplies that are mostly exported to the U.S.

Due to the increased volume on the Capline, shipping time was also expected to decrease to two weeks from three weeks previously, the sources added.

Capline is operated by Marathon Petroleum Corp and also owned by Plains All American Pipeline LP and BP Plc .

Last month, Marathon’s top executive said that the pipeline - once a major artery to deliver imports and Gulf of Mexico crude to the U.S. Midwest - will likely be reversed to move heavy Canadian crude south to Louisiana.

A Marathon spokeswoman declined to comment. (Reporting By Catherine Ngai; Editing by Chizu Nomiyama and Marguerita Choy)

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