NEW YORK (Reuters) - U.S. oil and gas pipeline operator MPLX LP said on Wednesday it will restart early on Thursday its Ozark pipeline, a conduit for crude from the Cushing, Oklahoma, storage area to refineries in the Midwest.
The Ozark system was shut on Tuesday after an operational check, the company said. MPLX did not give a reason for the check but Oklahoma has recently suffered from flooding and storms.
Ozark carries 360,000 barrels per day of crude oil from Cushing, the delivery point for U.S. West Texas Intermediate (WTI) crude futures, to Wood River, Illinois, where Phillips 66 operates a refinery.
According to a shipper notice, the company expects the pipeline to operate at full capacity upon restart.
U.S. futures and cash crude markets at Cushing pared losses on the projected restart after falling on Tuesday due to the outage.
The June/July U.S. West Texas Intermediate crude cash roll strengthened to as high as minus 15 cents per barrel on Wednesday from minus 50 cents earlier in the day, dealers said. The cash roll is typically the three-day period after the front-month futures contract expires, when traders rebalance their positions.
News of the restart also narrowed the discount between the front-month July and August U.S. crude futures from the lowest in nearly three months and helped WTI futures pare losses, traders and brokers said.
U.S. crude futures settled down 33 cents, or 0.6%, at $58.81 per barrel, after falling to as low as $56.88, the lowest since March 12.
Trading in the cash roll and the front-month spread is closely tied to supply and demand at Cushing.
More than a week of downpours and deadly tornadoes have devastated the central United States, bringing record-breaking floods to parts of Oklahoma and Arkansas.
More rain is forecast and the flooding is expected to spread, according to the National Weather Service (NWS) and local officials.
Late on Tuesday, Tallgrass Energy LP said it halted all deliveries to destinations on the Pony Express Pipeline, a crude oil system, because of the weather and flooding in central Oklahoma.
Tallgrass last week shut down the pipeline’s south end segment, which runs from Sterling, Colorado, to Cushing, because of flooding on the Cimarron River.
Meanwhile, operations at the HollyFrontier Corp refinery in Tulsa, Oklahoma, were temporarily shut down on May 22 and will remain shut until the risk of flooding has diminished, the company said in a statement on Wednesday.
Additional reporting by Arijit Bose in Bengaluru; editing by Matthew Lewis and Christian Schmollinger