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Oil prices fall as U.S. grants Iran sanction waivers to major 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 major buyers to still import Iranian crude, at least temporarily.

Front-month Brent crude futures were at $72.41 per barrel at 0348 GMT on Monday, down 42 cents, or 0.6 percent from their last close.

U.S. Intermediate (WTI) crude futures were down 35 cents, or 0.6 percent, at $62.79 a barrel.

Both Brent and WTI have lost more than 15 percent in value since early October, in part as hedge funds have cut their bullish wagers on crude to a one-year low, data showed on Friday.

re-introduced sanctions against on Monday, restoring measures lifted under a 2015 nuclear deal negotiated by the administration of Barack Obama, and adding 300 new designations including Iran's oil, shipping, insurance and sectors.

Despite this, prices came under pressure as will allow several countries to continue importing crude from despite the sanctions.

"The impact of the sanctions is going to be largely softened as a result of this allowance," said Sukrit Vijayakar, of Indian Trifecta.

The said on Friday it will temporarily allow eight importers to keep buying Iranian

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.

said on Monday it has been granted a waiver to at least temporarily continue to import condensate, a super-light form of crude oil, from and also still continue financial transactions with the country.

said on Monday it was in close communication with the While declined to detail any potential sanction waivers, he said his government had asked Washington that sanctions should not have an adverse impact on Japanese companies.

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 Emirates NBD

SUPPLY SURGE

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 United States and - in October rose above 33 million bpd for the first time, up 10 million bpd since 2010.

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)

(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: Mon, November 05 2018. 11:35 IST
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