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Oil Pipeline Fire in Minnesota Kills 2 Workers, Sends Prices Soaring

A fire at a major pipeline from Canada that feeds oil to the United States killed two workers and sent oil prices soaring before burning out Thursday morning, officials said.

The two were fixing the underground pipeline when fumes apparently escaped, igniting the blaze Wednesday in Clearbrook, about 215 miles northwest of Minneapolis, said Kristine Chapin, a spokeswoman for the Minnesota Department of Public Safety. Nearby residents were evacuated because of the thick black smoke in the sparsely populated area.

"It looks like it's out now. They're just mopping up and making sure," Blake Olson, a pipeline terminal supervisor, said Thursday morning.

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Enbridge Energy Inc.'s 34-inch pipeline carries crude oil from Saskatchewan to the Chicago area, Chapin said. The pipe had leaked a few weeks ago and was being repaired, she said.

"It appears as though one of those fittings may have failed and caused fumes to leak, and it caught fire," Chapin said. She said there wasn't an explosion and described it as a "big fire."

The crude is used to make several kinds of fuel, such as gasoline and home heating oil. An average of 1.5 million barrels of oil passes through the pipeline every day, said Larry Springer, a spokesman for Houston-based Enbridge.

The U.S. consumes 20.58 million barrels of oil a day.

The pipeline that leaked and three others were shut down, Enbridge said. Two of the lines were re-started Thursday morning, Springer said. Another line will be inspected to see if it is safe to come back online, but the line with the leak will likely be out for some time, Springer said.

"Nothing is going to be re-started until we're absolutely sure it's safe to be operated," Springer said.

The fire added jitters about the markets.

Light, sweet crude for January delivery jumped $3.47 to $94.09 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe. It climbed as much as $4.55 to $95.17 in the electronic session before slipping back.

The contract had plunged $3.80 to $90.62 a barrel Wednesday in New York, adding to the previous session's drop of $3.28. That was a front-month contract's second largest two-day price decline since the Nymex introduced futures trading in 1983.

In London, January Brent crude rose $2.21 Thursday to $92.02 a barrel on the ICE Futures exchange.

The names of the workers killed were not immediately released.