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Oil prices drop over one percent on Iran sanctions waivers

Reuters  |  NEW YORK 

By Stephanie Kelly

NEW YORK (Reuters) - prices fell on Tuesday, with U.S. crude futures hitting an eight-month low, a day after granted sanction waivers to top buyers of Iranian and as said it has so far been able to sell as much as it needs to.

futures fell $1.04 to settle at $72.13 a barrel, down 1.42 percent. The global hit a session low of $71.18 a barrel, the lowest price since Aug. 16.

U.S. Intermediate (WTI) crude futures fell 89 cents, or 1.41 percent, to settle at $62.21 a barrel. The session low was $61.31 a barrel, the weakest price since March 16.

said it has so far been able to sell as much oil as it needs and urged European countries opposed to U.S. sanctions to do more to shield

The on Monday restored sanctions targeting Iran's oil, and transport sectors and threatened more action. said aimed to bring Iranian to zero, but 180-day exemptions were granted to eight importers: China, India, South Korea, Japan, Italy, Greece, and

This group takes as much as three-quarters of Iran's seaborne oil exports, trade data shows, meaning the Islamic Republic will still be allowed to export some oil for now.

Industry estimates suggest Iran's have fallen 40 to 60 percent since Trump said in May he would reimpose sanctions. However, exemptions could allow exports to rise again after November.

Turkish said the country, a top importer of Iranian oil, would not abide by the sanctions, which he said were aimed at "unbalancing the world."

Jim Ritterbusch, of said that the sanctions alone will not drive up

"While the Iranian sanctions should still be viewed as a latent bullish consideration capable of limiting much additional price slippage, it would appear that the Iranian factor alone will not be capable of spurring higher prices without major assistance from a renewed strengthening in the equities, sustainable weakening in the U.S. dollar or a significant cut back in production," Ritterbusch said in a note.

Concerns about weighed on prices. The trade dispute between the and threatens growth in the world's two biggest economies, and currency weakness is pressuring economies in

On the supply side, U.S. is expected to average 12.06 million barrels per day (bpd) in 2019, passing the 12 million bpd milestone sooner than expected on surging domestic shale output, the said on Tuesday.

U.S. crude stocks rose by 7.8 million barrels in the week ending Nov. 2 to 432 million, data from industry group the American Institute showed on Tuesday. Analysts had expected an increase of 2.4 million barrels.

Output is rising from the world's top three producers. Russia, the and combined produced more than 33 million bpd for the first time in October, enough to meet more than a third of the world's consumption of almost 100 million bpd.

Top crude exporter has cut the December price for its Arab Light grade for Asian customers.

Hedge fund managers were net sellers of petroleum-linked futures and options last week.

on Tuesday lowered its price forecast for Brent, saying the global will stay at $77.5 per barrel to mid-2019.

Graphic: Russian, U.S. & Saudi (

Graphic: Iran (

Graphic: Iranian of 8 countries given waivers (

(Reporting by in New York; Additional reporting by Shadia Nasralla in London and Henning Gloystein in Singapore; Editing by and Leslie Adler)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Wed, November 07 2018. 03:28 IST