Oil prices dipped on Wednesday as rising output and US sanction waivers that allow Iran's biggest buyers to keep taking its crude reinforced the outlook for a well-supplied market.
US West Texas Intermediate (WTI) crude was at $61.84, down 37 cents, or 0.6 per cent.
Brent and WTI have slumped by 17.4 and 19.7 per cent respectively from recent peaks touched in early October.
Refinitiv Eikon data showed Iranian crude exports have fallen to 1 million barrels per day (bpd) so far in November, down from around 3 million bpd in mid-2018.
But Iran supply is expected to rise after November as waivers are used to start ordering more Iranian oil.
Japan's refiner JXTG Holdings said on Wednesday it might resume orders of Iranian oil in December.
In China, a flotilla of supertankers carrying around 9 million barrels of Iranian oil worth about $650 million is sitting outside Dalian port.
"With the waivers, prices can be managed in the $70-$80 per barrel range, with the upside at around $85 per barrel and the downside limited to $65 per barrel," FGE said.
WAVE OF SUPPLY
Output from the world's top-three producers Russia, the United States and Saudi Arabia, broke through 33 million bpd for the first time in October. These three countries now meet more than a third of global consumption.
Iraq, second-largest producer in the Organization of the Petroleum Exporting Countries (OPEC), plans to raise output to 5 million bpd in 2019, from 4.6 million bpd currently.
Inventories are also swelling.
U.S. crude stocks climbed by 7.8 million barrels in the week ending Nov. 2 to 432 million, data from the American Petroleum Institute showed on Tuesday.
J.P.Morgan said "global floating storage has increased by 3.6 million barrels since July '18 to 33.9 million barrels."
Despite the well-supplied market, J.P. Morgan still warned "the risk to supply remains very high" due to geopolitical risk and a "lack of spare capacity."
Part of this risk comes from Venezuela, where crude production is in "free-fall" and could soon drop below 1 million bpd, the International Energy Agency's Executive Director Fatih Birol said on Tuesday, down from the more than 2 million bpd it averaged last year.