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Oil prices extend falls on well supplied market, Iran sanction waivers

Reuters  |  SINGAPORE 

By Gloystein

SINGAPORE (Reuters) - fell on Wednesday to extend losses from the previous session, with markets well supplied amid rising production and U.S. sanction waivers that allow Iran's biggest customers to continue buying its crude.

U.S. Intermediate (WTI) were at $61.79 per barrel at 0053 GMT, down 42 cents, or 0.7 percent, from their last settlement.

International benchmark Brent was yet to trade.

The increasingly well supplied market has turned sentiment, which until early October was largely bullish, pushing Brent to four-year highs of more than $86 per barrel ahead of the sanctions.

Brent and WTI have lost 17.4 and 19.7 percent in value respectively from their most recent peaks in early October.

Fawad Razaqzada, at Forex.com, said he had become "quite bearish on oil prices".

Razaqzada pointed to lower demand growth forecasts, higher supply and sanctions waivers to most its biggest buyers which would allow its crude exports "to remain around their current levels for a good few months still".

U.S. said "have softened (as) supply continues to come in higher-than-expected, particularly from the U.S., Middle East OPEC, and "

Output from the world's top-3 producers Russia, the and Saudi Arabia, broke through 33 million barrels per day (bpd) for the first time in October, meaning these three countries alone now meet more than a third of the almost 100 million bpd of global consumption.

Iraq, the second-largest within the Organization of the Petroleum Exporting Countries (OPEC) behind Saudi Arabia, is targeting production capacity of 5 million bpd in 2019, up from 4.6 million bpd currently, said on Tuesday.

"The market is well supplied, and we see a balanced rather than tight market ahead. This no longer supports our $85 per barrel year-end and 1H19 forecast," said.

Instead, the said it expected Brent to average around $77.5 per barrel to mid-2019.

With production rising, crude 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 industry group the showed on Tuesday.

Despite the increasingly well supplied market, Razaqzada warned that it was becoming "increasingly costly for inefficient producers to maintain output at current levels".

Venezuela's crude production was in "free-fall" and could soon drop below 1 million bpd, the International Energy Agency's warned on Tuesday, down from the more than 2 million bpd it averaged last year.

(Reporting by Gloystein; Editing by Joseph Radford)

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

First Published: Wed, November 07 2018. 06:29 IST
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