DTN Oil Update

Barani Krishnan
DTN Refined Fuels Market Reporter

SECAUCUS, NJ (DTN) -- Oil prices settled flat to higher Thursday after a strong US GDP number for the second quarter erased early losses caused by worries that stalled Kurdish crude exports could soon return to the market.

NYMEX-traded WTI crude for November delivery settled down $0.01 at $64.96 bbl after losing as much as 65 cents earlier. ICE Brent crude for November delivery rose $0.11 to $69.42 bbl, after initially dipping 87 cents.

Among oil products, distillates extended their recent rally sparked by U.S. inventory losses. The front-month ULSD contract rose $0.0493 to $2.4265 per gallon, after being in a range of $2.4321-$2.3681 per gallon.

Gasoline remained the weakest component of the oil complex. October RBOB gasoline futures slid $0.0166 to $2.0022 per gallon, after moving between a high of $2.2018 and a low of $1.9854 per gallon.

The U.S. Dollar Index jumped 70 points, or 0.7%, to 98.57.

Oil prices and the dollar spurted higher after the U.S. Bureau of Economic Analysis finalized an annualized gross domestic product growth of 3.8% for the second quarter, after a contraction of 0.6% in the April to June period. The higher GDP growth fostered greater market confidence in the economy and, correspondingly, demand for oil.

Oil prices came under pressure earlier in the session after the Association of the Petroleum Industry of Kurdistan presented a framework to resume oil flows shut for two-and-a-half years in the northern Iraq territory.

The pipeline was shut over disputes between the Iraqi federal government, Kurdish regional government and international oil companies, after Turkey was fined $1.5 billion for "unauthorized exports".

But APIKUR said in a statement that Baghdad, Erbil and eight private companies, which account for more than 90% of oil production in northern Iraq, should be allowed to resume exports from the territory without any delay. Until it was shut down, the pipeline exported at least 230,000 bpd of crude.