Oil prices retreat after spiking by over four dollars as Canada-U.S. pipeline catches fire

30-Nov-07

Oil prices jumped over four dollars on Thursday after pipeline carrying crude oil from Canada to the U.S. Midwest caught fire. Two workers who were fixing the underground pipeline were killed when fumes apparently escaped and ignited the blaze in Clearbrook, Minnesota. The pipeline has the capacity to supply 17% of domestic crude imports. Oil prices later retreated on news that the pipeline seems to be returning to service - Light, sweet crude for January retreated to US$91.55 a barrel Thursday on the New York Mercantile Exchange. Two of the four lines, which can carry a total of 680,000 bpd of crude were restarted. A third line, designed to carry 700,000 bpd of heavy crude is shut down but is expected to return to service later on confirmation that it was not damaged in the fire. The fire-damaged line, which can carry 420,000 bpd of crude, could be repaired and returned to service within two or three days. In London, January Brent crude rose to US$90.41 a barrel on the ICE futures exchange.