Two Huge (?) Pipeline Stories That Might Make News Monday

Enbridge shuts down a major pipeline due to spill

BP increasing flow of midwest oil just before the spill

Expect some volatility in WTI/Canadian oil market Monday

Economic spillover (pun intended) for the Bakken? -- no, there is no Bakken oil spil

Keystone XL decision looms in background

Updates

Later: "opening" futures Sunday evening suggest this is not having a major impact on market in general; stock mkt futures up a bit; WTI up a bit; mostly flat

Original Post

First link: Enbridge oil spill due to vehicular accident; does not know when they will re-open the major pipeline.

The pipeline, called Line 14/64, normally carries up to 318,000 barrels of oil a day to Griffith, Indiana, from Superior, Wisconsin.

They say this will further depress the price paid for Canadian oil, but I can't imagine that Bakken oil won't be affected also, if Canadian oil is affected.

Second link: a bit more confusing for me because the writer combines two stories -- the planned ramping up of oil before the spill AND then the spill that resulted in Enbridge closing the pipeline.

The line usually carries 175,000 barrels per day of West Texas Intermediate and West Texas Sour from the storage tanks in Cushing, northeast to BP's massive 431,500 bpd Whiting, Indiana, refinery, a major supplier of gasoline and diesel to the Chicago market.

A spokesman for Genscape said the refinery was running normally but the decision to cut back on the flow out of Cushing could be economic.

"BP could be maximizing the CDU that runs Canadian heavy crude while cutting back on the one that runs WTI and WTS," said Abudi Zein, a spokesman for Genscape.

"The other lines that we monitor and that could compensate are already running full," Zein said, adding that the outage will "blow out" the Canadian crude spreads.

Canadian crude is already heavily discounted to the United States WTI benchmark. On Wednesday, Canadian Heavy crude was bid at $35 under WTI while sellers were looking for $30 under. WTS is trading at about a $25 premium to Canadian crude, according to Reuters data.

From wiki:

Whiting is a city located in the Chicago Metropolitan Area in Lake County, Indiana, which was founded in 1889. The city is located on the southern shore of Lake Michigan. It is roughly 16 miles from the Chicago Loop and just short of two miles from Chicago's South Side. Whiting is home to Whiting Refinery, the largest oil refinery in the Midwest. 

It is not clear how this will play out, but my hunch is we will see volatility in the oil markets, and it's possible the price of gasoline will edge up in the Chicago area. 

This might be a stretch, but that decision to kill the Keystone XL looks more and more irresponsible/ill-advised all the time. Yes, spills happen, but they're cleaned up and life goes on. But in the meantime, the lack of adequate pipeline capacity threatens operations at any given refinery. The country runs on gasoline/diesel.