Oil Little Changed on Stable Dollar, Caspian Pipeline Restart

By Grant Smith

Aug. 22 (Bloomberg) -- Crude oil traded little changed, after gaining nearly 5 percent yesterday, as the U.S. dollar stabilized and Turkey restored flows through a Caspian Sea pipeline closed by fire.

The Baku-Tbilisi-Ceyhan pipeline, which transports oil from Azerbaijan through Georgia to Turkey's Mediterranean coast, resumed normal flows today after a fire halted exports earlier this month, officials said. Oil is still poised for its first weekly gain in two weeks and its biggest increase since the week ended June 6.

``Recently you've seen a tick-for-tick for move in the oil price and the U.S. dollar,'' Hakan Kocayusufpasaoglu, director of commodity derivatives at Credit Suisse Group in London, said in a Bloomberg Television interview. ``Now that the conflict is pretty much over'' in Georgia, ``you would assume that it would have less of an impact.''

Crude oil for October delivery was at $120.89 a barrel, 29 cents lower at 9:59 a.m. London time on the New York Mercantile Exchange. The contract is set for a weekly gain of 6.3 percent. Yesterday, the contract surged $5.62, or 4.9 percent, to settle at $121.18 a barrel, the biggest increase since June 6.

All Russian military units in Georgia, belonging to peace- keeping contingents in the zone of the South Ossetian conflict, will complete their withdrawal tomorrow, Defense Minister Anatoly Serdyukov said.

Poland signed an agreement on Aug. 20 with the U.S. to host an American anti-missile base in exchange for aid to bolster the country's air defenses. Russia has warned the move will lead to a new arms race in Europe and is reconsidering its ties with the North Atlantic Treaty Organization.

The dollar rose 0.2 percent to $1.4846 per euro by 9:56 a.m. in London, from $1.4899 yesterday. The U.S. currency climbed 0.7 percent to 109.17 yen from 108.43.

Brent crude oil for October settlement fell as much as 71 cents, or 0.6 percent, to $119.45 a barrel on London's ICE Futures Europe exchange. It was at $119.81 a barrel at 9:58 a.m. London time. The contract rose yesterday by $5.80, or 5.1 percent.

To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net