DTN Oil Update
Oil Prices Soften on Emerging Signs of Kurdish Oil Return
VIENNA (DTN) -- Oil prices edged lower Thursday (9/25) morning as the market braced for the imminent return of at least 230,000 bpd of Kurdish supply, after a two-day rally fueled by the White House's hawkish turn on its Russian policy.
In crude oil, NYMEX-traded WTI for November delivery fell $0.42 to $64.57 bbl, and ICE Brent for November delivery retreated $0.33 to $68.99 bbl.
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Among oil products, October RBOB gasoline futures slid $0.0174 to $2.0014 per gallon after moving between a high of $2.2018 and a low of $1.9961. The front-month ULSD contract bucked the broadly lower trend, rising $0.0196 to $2.3968 per gallon, after being in a range of $2.4056-$2.3681.
The U.S. dollar index was higher by 28 points at 98.15.
Oil prices came under pressure after the Association of the Petroleum Industry of Kurdistan presented on Wednesday (9/24) a framework to resume oil flows shut for two-and-a-half years in the northern Iraq territory.
The deal between Baghdad, Erbil and eight private companies, which account for more than 90% of oil production in northern Iraq, "should allow exports to restart in the coming days", the APIKUR statement read.
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".
An agreement could see the immediate restart of at least 230,000 bpd of oil flows to international markets already burdened by oversupply woes amid lackluster global demand growth and OPEC's commitment to open the spigots.
Notwithstanding the Kurdish development, low oil inventories in the OECD continued to provide a floor to oil prices, limiting their slide.
The U.S. Energy Information Administration on Wednesday reported that commercial crude oil inventories shrank further last week on continued export strength to 4% below the five-year seasonal average.
The EIA also further reported draws to 1.1 million bbl in gasoline stocks and 1.7 million bbl in distillate fuel oil stocks for the week ending September 19 of 1.1 million bbl and 1.7 million bbl, respectively.