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The Keystone pipeline that was shut down earlier this month after a spill has returned to operation TC Energy, its operator, said.
TC Energy shut down the pipeline, which is a vital conduit for Canadian oil to the United States, after a leak was reported in Nebraska, into a creek. It took several days to contain the leak and then the company proceeded with repairing the damaged piece of infrastructure.
On December 23, in its latest update on the pipeline, TC Energy said that the PHMSA had approved the company’s Restart Plan for the Cushing segment.
“We will be commencing activities to support the safe restart of the segment, including rigorous testing and inspections, and this will take several days,” TC Energy said last week.
The 2,687-mile Keystone Pipeline System plays a key role in connecting Alberta’s crude oil supplies to U.S. refining markets in Illinois, Oklahoma, and Texas, as well as connecting U.S. crude oil supplies from the Cushing, Oklahoma, hub to refining markets on the U.S. Gulf Coast through the Marketlink Pipeline System.
As a result, the shutdown had a positive effect on oil prices and the fact that the pipeline did not return to operation sooner rather than later prolonged that effect. Now that it has been restarted, however, the restart of Keystone added to a growing number of bearish factors playing out in oil prices.
The biggest among them remains Chinese demand rebound as reports about a surge in Covid infections multiply. An unexpected build in U.S. crude oil inventories also served to weigh on prices, even though it was a modest one, at 700,000 barrels.
As a whole, the oil price outlook remains highly uncertain, according to analysts.
"With so many moving parts, I don't think anyone can say anything with any strong degree of conviction," Craig Erlam, senior market analyst at OANDA, told Reuters earlier today.
"OPEC+ could make an announcement at any point and suddenly everything changes. Not to mention Russia's war in Ukraine and how that develops."
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.