DTN Oil

WASHINGTON (DTN) -- Oil futures nearest delivery on the New York Mercantile Exchange and Brent on the Intercontinental Exchange declined in overnight trade in reaction to media reports suggesting Iraqi crude oil exports from the semi-autonomous region of Kurdistan are set to resume this week after a nearly month-long disruption.

About 450,000 barrels per day (bpd) of crude oil exports via the Turkish port of Ceyhan have been halted in recent weeks due to the standoff between Iraq, the semi-autonomous Kurdistan Regional Government and Turkey. "Disruptions to global energy supply don't serve anyone's interests," National Security Council spokesman John Kirby told reporters in Washington. It appears the disagreement has been finally settled after a phone call between U.S. Secretary of State Anthony Blinken and Iraqi Prime Minister Mohammed Shiaa al-Sudani who discussed regional security and energy independence Tuesday, according to a statement from the State Department.

"The Secretary welcomed the Prime Minister's bold steps toward energy independence and, by extension, improving services for the Iraqi people. He commended the Prime Minister's ongoing efforts to reach an agreement between the Government of Iraq and the Kurdistan Regional Government on the export of oil through the Iraq-Turkey Pipeline and management of oil revenues," read the statement. Iraqi news outlets reported Wednesday morning that the crude flows from Kurdistan are set to resume this week. The two sides had already reached a temporary agreement earlier this month, but oil flows had yet to resume. The situation remains fluid.

Separately, the Department of Energy on Monday reported a 1.6-million-barrel (bbl) release of crude oil from the Strategic Petroleum Reserve during the week ended April 14, which follows a 1.6-million-bbl drawdown during the first week of April. The Department of Energy will continue to release crude oil from the Strategic Petroleum Reserve through the second quarter in fulfilling a congressional mandate, with another 22.4 million bbl set to be released by June 30.

Wednesday morning's move lower comes despite the American Petroleum Institute reporting U.S. total oil and petroleum product inventories declined by a larger-than-expected margin during the week ended April 14. Further details of the report showed a 2.675-million-bbl drawdown from commercial crude oil stocks in the reviewed week, well above an anticipated 500,000-bbl downturn. Stocks at the Cushing, Oklahoma, tank farm, the New York Mercantile Exchange delivery point for West Texas Intermediate futures, continued lower with a roughly 600,000-bbl decrease.

Gasoline inventories, meanwhile, fell by 1 million bbl as of April 14 versus an expected 1.2-million-bbl draw. The API reported a 1.9 million-bbl-draw in distillate inventories, more than twice the expected 900,000-bbl decline. The U.S. Energy Information Administration will release its official inventory report at 10:30 a.m. EDT.

Near 7:15 a.m. EDT, NYMEX May WTI futures declined $1.59 to below $80 bbl ahead of expiration at Thursday's closing bell, with the June contract trading at $79.42 bbl. ICE June Brent futures fell $1.66 to $83.11 bbl. NYMEX May RBOB futures dropped back $0.0515 gallon to $2.6994 gallon, continuing a retreat from last week's five-month high $2.8943. May ULSD futures declined for the fifth consecutive session, falling $0.0349 to a $2.5650 gallon four-week low.