Pipeline ruptures, Chicago spot jumps 24 cents

Spot market gasoline and gasoline blendstock
futures in Chicago posted massive one-day gains Friday afternoon, as traders,
marketers and refiners scrambled to cover short positions and pending supply
requirements on news crude oil supply from Canada to the United States was cut
dramatically by a rupture in an Enbridge pipeline that feeds several Midwest
refineries.

Canada is the largest oil exporter to the U.S. and Enbridge’s pipeline
system is the main transit route for those exports. A second Enbridge line has
been shut since a rupture was discovered in late July, and the pipeline carrier
is waiting for approval to restart that line.

The shutdown of the 670,000 bpd Enbridge pipeline is expected to impact
deliveries into Citgo’s 167,000 bpd refinery in Lemont, Illinois, BP’s 435,000
bpd Whiting, Indiana plant and ExxonMobil’s 238,600 bpd Joliet, Illinois
refinery.

—–

Expect a big jump in prices over the weekend. All spike lines are $2.90-$3.00. Expect most to stop at the magical $2.99. Michigan and North West Indiana may go above that, to $3.09-3.15. Ohio may fall lower as it is farther from the mess, say $2.89.

Updated: September 10, 2010 — 8:29 pm

3 Comments

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  1. Bill: Thanks for the timely post. I was traveling in Indiana this weekend, and I thought we were safe when there was no hike on Friday, and I wasn’t aware of the pipeline news. News like this makes prediction near impossible. Here’s another article on the pipeline break:

    http://customercenter.murphyoilcorp.com/index.cfm?show=803&product=DTNMKTWRHEADLINENEWS&id=07020A57

    Ed

  2. CNBC is reporting the pipeline is back up and operational. Lets see if spot prices drop back down those same 24 cents they shot up on Friday. I bet not.

  3. Not 25, but 18. RBOB was up 5¢ in that time, so it’s close.

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