By Angela Macdonald-Smith
Aug. 25 (Bloomberg) -- Crude oil was little changed in New York after dropping more than $6 a barrel on Aug. 22, the most in percentage terms for more than three years, as BP Plc resumed flows through a Caspian Sea pipeline.
The Baku-Tbilisi-Ceyhan pipeline, which moves oil from Azerbaijan through Georgia to Turkey's Mediterranean coast, may resume full operations within days after a fire halted exports, a BP Plc spokeswoman said Aug. 23. Oil also fell on Aug. 22 as the dollar strengthened.
``The pipeline restart was a contributing factor, putting more supply in the market,'' said Jonathan Barratt, managing director of Commodity Broking Services in Sydney. ``Oil is trading in a very volatile, wide range. The volatility is telling me that a base is trying to form'' and prices won't sink much further, he said.
Crude oil for October delivery was at $114.45 a barrel, down 14 cents, in after-hours electronic trading on the New York Mercantile Exchange at 6:26 a.m. in Singapore.
Oil fell $6.59 on Aug. 22, or 5.4 percent, to $114.59 a barrel, the biggest drop since Dec. 27, 2004. In dollar terms, it was the biggest decline since Jan. 17, 1991, when U.S.-led forces expelled Iraq from Kuwait. The October contract, which had jumped 4.9 percent the previous day, still rose 0.6 percent for the week.
The price swings indicate that fundamental factors aren't the only influence in the market, Barratt said.
``That's a huge move,'' he said. ``From that price action on Thursday and Friday it seems there are some big boys pushing it around.''
BP, Europe's second-largest oil company, StatoilHydro ASA and partners cut output at Caspian oil fields following the closure of the 1,768-kilometer (1,100-mile) Baku-Tbilisi-Ceyhan link on Aug. 5. The pipeline is used to carry oil from Azerbaijan through Georgia to Turkey, where it's loaded onto tankers for U.S. and European markets.
BP is ``carrying out integrity testing on the pipeline,'' Tamam Bayatly, a company spokeswoman, said by telephone from Baku on Aug. 23. She didn't specify a date for full production, due this week.
Oil may rise this week because of a weakening dollar, tension between the U.S. and Russia and falling gasoline stockpiles, a Bloomberg News survey found. The dollar fell 0.7 percent last week, to $1.4793 per euro on Aug. 22. It was at $1.4789 per euro at 6:38 a.m. in Singapore.
Sixteen of 29 analysts surveyed, or 55 percent, said prices will increase through Aug. 29. Seven of the respondents, or 24 percent, said oil will be little changed and six said there would be a drop in prices. Last week 63 percent expected prices to increase.
Brent crude oil for October settlement declined $6.24, or 5.2 percent, to $113.92 a barrel Aug. 22 on London's ICE Futures Europe exchange.