NEW YORK, Oct 19 (Reuters) - Front-month U.S. West Texas Intermediate crude futures (WTI) traded at the biggest discount to the second month in nearly a year on Friday, slipping from a prolonged period of trading at a premium as traders anticipate inventory builds in Cushing, Oklahoma, the delivery point for WTI, as new pipelines come online:
* U.S. crude for delivery in November traded as much as 17 cents per barrel lower than futures for delivery in December CLc1-CLc2, the biggest discount since Nov. 20, 2017.
* The spread slipped into contango, a structure where nearby prices trade lower than forward prices, on Thursday for the first time since May 22.
* A surge in oil production had largely trapped barrels in the Permian basin, the largest oilfield in the United States, as transportation bottlenecks emerged, depressing regional midland crude prices for months.
* However, the anticipated startup of Plains All American’s expanded Sunrise Pipeline to Cushing, the delivery point for U.S. crude futures, in early November is expected to significantly ease constraints.
* “Sunrise running and ramping up more than anticipated so stronger Midland and weaker WTI,” one trader at a merchant said.
* The startup of the pipeline also comes at a time when Midwest refiners are wrapping up seasonal maintenance work, adding to stockpile increases at Cushing, dealers said.
* Inventories at Cushing have already risen for four straight weeks, according to data from the Energy Information Administration. (Reporting by Devika Krishna Kumar in New York Editing by Marguerita Choy)