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Oil prices fall as U.S. grants Iran sanction waivers to eight importers

Reuters  |  SINGAPORE 

By Gloystein

SINGAPORE (Reuters) - prices fell on Monday as the start to U.S. sanctions against Iran's fuel exports was softened by waivers that will allow some countries to still import Iranian crude, at least temporarily.

Front-month Brent crude futures were at $72.39 per barrel at 0142 GMT on Monday, down 44 cents, or 0.6 percent from their last close.

U.S. Intermediate (WTI) crude futures were down 53 cents, or 0.8 percent, at $62.61 a barrel.

Brent has lost more than 16 percent in value since early October, while WTI has declined by more than 18 percent since then.

This came as traders cut their bullish wagers on crude futures to a one-year low by the end of October, the fifth consecutive cut during a month when prices posted their largest drop since July 2016, data showed on Friday.

Prices have been coming under pressure since it became clear that was allowing several countries to continue importing crude from despite the sanctions, which officially started on Monday.

The said on Friday it will temporarily allow eight importers to keep buying Iranian when it re-imposes sanctions, aimed at forcing to curb its nuclear, missile and regional activities.

has so far not named the eight, referred to as "jurisdictions", a term that might include which the does not regard as a country.

China, India, South Korea, Turkey, Italy, the and have been the top importers of Iran's oil, while occasionally buys Iranian crude, although it is no major buyer.

markets have been preparing for the sanctions for months.

"Iranian exports and production had been declining steadily...Iranian exports show a decline of more than 1 million barrels per day (bpd) as of October from May," said of

On the demand side, Bell warned that consumption may be slowing due to an economic slowdown, as seen in a sharp drop in refining profits.

"Sagging refining margins at a time of weak crude prices sends a very telling message to us that demand is underperforming," he said.

A slowdown in demand would come just as output is rising.

Joint output from the world's top producers - Russia, the and - in October rose above 33 million bpd for the first time, up 10 million bpd since 2010.

These three countries alone meet more than a third of consumption.

In the Middle East, (ADNOC) plans to increase its to 4 million bpd by the end of 2020 and 5 million bpd by 2030, ADNOC said on Sunday, compared with current output of just over 3 million bpd.

(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: Mon, November 05 2018. 08:33 IST