Oil is poised for the longest streak of losses in more than four years as a forecast for rising American output and the U.S. granting of waivers for eight nations to temporarily continue purchasing Iranian crude eased concerns of a supply crunch.
Futures in New York declined as much as 0.9 percent and are set for an 8.3 percent drop in eight straight sessions. The U.S. government forecast the nation’s oil output will increase this year by the most on record, while industry data signaled American crude inventories rose last week. Meanwhile, U.S. government waivers will allow some of Iran’s biggest customers to buy crude from OPEC’s No. 3 producer for another six months.
Supply concerns that drove crude to a four-year high last month faded on speculation the U.S. would give exemptions to Iranian oil buyers to lower costs at pumps and as the Organization of Petroleum Exporting Countries pledged to offset any supply gaps. The group led by Saudi Arabia will gather in Abu Dhabi this weekend as they face a fresh surge of U.S. shale oil threatening to unleash a new surplus in 2019 amid the recent slump in oil prices.
“The focus for now remains on the waivers issued to eight countries, allowing them to continue the purchase of Iranian barrels temporarily,” Stephen Innes, Singapore-based head of trading for Asia Pacific at Oanda Corp. “There were more bearish overtones in terms of supply with the American crude output seen rising this year by the most ever, coupled with the call on OPEC to ramp up even higher.”
West Texas Intermediate crude for December delivery dropped as much 54 cents to $61.67 a barrel on the New York Mercantile Exchange and traded at $61.98 on the New York Mercantile Exchange at 10:30 a.m. in Singapore. Total volume traded was more than double the 100-day average.
Brent futures for January settlement slid 1 cent to $72.12 on the London-based ICE Futures Europe exchange. The contract fell 1.4 percent to close at $72.13 on Tuesday. The global benchmark crude traded at a $9.97 premium to WTI for the same month.