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Oil drops on Iran sanction exemptions, economic concerns

Reuters  |  SINGAPORE 

By Gloystein

SINGAPORE (Reuters) - prices slipped on Tuesday, weighed down by exemptions from that will allow Iran's biggest customers to keep buying from Tehran, as well as concerns that an economic slowdown may curb fuel demand growth.

U.S. Intermediate (WTI) crude futures were at $62.95 a barrel at 0355 GMT, down 15 cents, or 0.2 percent, from their last settlement.

International Brent futures were down 28 cents, or 0.4 percent, at $72.89 a barrel.

Analysts said expectations of an economic slowdown in coming months were weighing on the fuel demand outlook, while concerns eased on the supply-side after granted eight importers of Iranian that will allow them to continue purchases.

gave 180-day exemptions to eight importers - China, India, South Korea, Japan, Italy, Greece, and These are Iran's biggest buyers, meaning will be allowed to still export some oil for now.

Jameel Ahmad, at said the "sanctions on have been ... priced into the oil markets", and that he would "instead focus more heavily on the global demand outlook because of the ongoing external uncertainties weighing down on economic prospects."

Ahmad added that he saw a slowdown in economic and fuel demand growth as "more of a risk for oil over the coming months."

Currency weakness is putting pressure on key growth economies in Asia, including and

At the same time, the trade dispute between the and is threatening growth in the world's two biggest economies.

On the supply-side, oil is in ample availability despite the sanctions against as output from the world's top-three producers, the and Saudi Arabia, is rising.

The three countries combined produced more than 33 million barrels per day (bpd) for the first time in October, meaning they alone meet more than a third of the world's almost 100 million bpd of

Amid ample supply, top crude exporter has cut its December price for its Arab Light grade for Asian customers by 10 cents per barrel versus November to a premium of $1.60 a barrel to the Oman/average, company said on Monday.

The price pressure on oil has scared off financial traders.

Hedge fund managers were net sellers of petroleum-linked futures and options for a fifth week running last week as concerns about sanctions on Iran evaporated and investors refocused on economic worries.

Portfolio managers have been net sellers of 371 million barrels since the end of September, taking their net long position to the lowest level for 15 months, according to records published by regulators and exchanges.

(Reporting by Gloystein; editing by Richard Pullin)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, November 06 2018. 09:44 IST