Crude oil futures weaker on report of Seaway Pipeline shutdown
BY DAVID BIRD
NEW YORK -- Losses in crude-oil futures prices deepened Thursday after an unconfirmed report that the Seaway Pipeline has been shut down, traders said.
The 400,000-bopd pipeline carries crude oil from Cushing, Okla., to refineries on the Texas Gulf Coast. Flows from Seaway and other pipelines have been instrumental in drawing down crude oil from the Midwest hub in recent weeks and sparking a jump in crude oil futures prices Wednesday to the highest level since March 2012.
Genscape, an energy intelligence group, issued a report Thursday saying the pipeline had been closed after it detected decreased power consumption at four pumping stations beginning Wednesday afternoon. Genscape said the line was moving an estimated 300,000 bopd before the shutdown.
Seaway Crude Pipeline Co LLC is a 50-50 joint venture between Enterprise Products Partners, the operator, and Enbridge.
Officials at Enterprise didn't immediately respond to requests for comment.
Phil Flynn, energy analyst at the Price Futures Group, said a shutdown of Seaway would allow crude oil to back up in tanks at Cushing, the delivery point for the New York Mercantile Exchange's futures contract and keep pressure on prices.
Nymex August-delivery light, sweet crude oil recently traded down $1.45/bbl, at $105.07/bbl.
Dow Jones Newswires