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Fire shuts key US pipeline causing oil prices to surge more than 4 percent higher but falls as fire is extinguished and pipelines reopen. MOREINFO: * Oil falls after fire extinguished at pipeline * BoE calls for flexible exchange rates * German banks agree to sell IKB * German jobless number less than expected * European shares flat on jittery banking investors SCRIPT: Oil fell back after prices surged more than $4 a barrel after an explosion crippled the main pipeline supplying Canadian crude to U.S. Midwest refineries - forcing operator Enbridge to halt nearly a fifth of U.S. imports. Two employees were killed in the blast. Prices eased back after the fire was put out and two of the four pipelines affected restarted. /// Meanwhile, it is inflexible exchange rates that are holding back the rebalancing of the global economy says the Bank of England. With the euro hitting record high levels last week, European politicians are complaining that their export industries are at risk at a time when the global outlook is deteriorating due to the credit crunch. Fast-expanding economies with large trade surpluses, such as China, are coming under increasing pressure to let their currencies float freely rather than continue to adjust them to the falling U.S. dollar. /// And German banks have agreed to sell subprime casualty IKB. IKB, which lends to roughly one in 10 of Germany's biggest companies nearly collapsed under the strain of losses on its investments in risky U.S. home loans but was saved by a bail-out spearheaded by state bank Kfw in August. /// And staying in Germany, it's jobless dropped more than expected despite growing concerns about a slowdown in the economy. It was its 20th consecutive monthly fall and brought the total number of Germans out of work to its lowest level since May 1995. However, problems on global credit marketes, surging oil prices and the euro's rise to successive records against the U.S. dollar have all helped to stir growth fears in recent months. /// European equities traded flat with mixed results in banking because of persistent concerns about write-downs. Credit Suisse was up and Fortis rose 1.5 percent after China's Ping An took a stake in the financial services firm. Royal Bank of Scotland shed 1.7 percent hit by renewed talk of possible write-downs linked to a credit crunch. The FTSEurofirst 300 index was steady at around 1500 points. The FTSEurofirst has crawled back into positive territory for the year. The benchmark has lost 6 percent this month, placing it on track for its worst monthly fall since Jan. 2003, hit by the U.S. subprime crisis. Stefanie McIntyre, Reuters COMPANIES MENTIONED: SYMBOLS: