Shutdown of a major US pipeline supplying to the Midwest pushes up oil prices

Reports of shutdown of a major US oil pipeline delivering oil to the Midwest region has led to supply concerns, pushing oil prices higher. Light sweet crude for October delivery spiked by over two dollars to US$76.4 on the Nymex, and to US$78.1 on the ICE Futures Exchange. Enbridge Energy Partners LP closed the pipeline on Thursday, after it began leaking in suburban Chicago. A date for reopening has not been decided. The pipe carries about 670,000 bpd from Superior, Wisconsin, to Griffith, Indiana. Despite ample oil and gasoline inventories, concerns abound that Midwest supplies could tighten if the pipeline stays closed for some time, sending retail gasoline prices spiraling up in the Midwest. Meanwhile, the IEA has said that world oil demand will keep rising as the economy expands but the increase in fuel consumption will be lower in 2011 than 2010 and demand could be a lot weaker if global growth slows. Current global oil supply is more than sufficient to meet current and expected demand over the next year.
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