Crude falls for fourth consecutive session on restart of a major US pipeline

21-Sep-10

Restart of the Enbridge pipeline 6A Friday, which carries Canadian crude into the US, has caused crude oil futures to fall for fourth consecutive session. Light, sweet crude for October delivery dipped to US$73.5 on the Nymex, while Brent crude on the ICE futures exchange fell to US$77.79. Brent crude contract remains higher amid relatively tight crude supplies and healthy refining margins there. The fall in prices follows last week’s 5% drop as traders' refocused on already high crude inventories amid concerns of the US economy. This weeks housing data reports could add to fears about slowing growth in USA, which could push down oil demand. A storm premium is being factored into the price as Typhoon Fanapi passed through the South China Sea, where much of China's offshore oil infrastructure is located, and on to Hong Kong. Any temporary shutdowns of platforms could prompt China to raise crude imports at a time when it is already the engine of global oil demand.