By Stephanie Kelly
NEW YORK (Reuters) - Oil prices rose on Monday after a steep five-day fall, as the United States formally imposed punitive sanctions on Iran but granted eight countries temporary waivers allowing them to keep buying oil from the Islamic Republic.
Oil markets have been anticipating the sanctions for months. Prices have been under pressure as major producers including Saudi Arabia and Russia have ramped up output to near-record levels, while weak economic figures in China have cast doubt on the demand outlook.
"We're not getting the price rally that many participants thought they were going to get out of the Iran sanctions situation," Yawger said.
Both oil benchmarks have slid more than 15 percent since hitting four-year highs in early October. Hedge funds have cut bullish bets on crude to a one-year low.
The United States has granted exemptions to China, India, Greece, Italy, Taiwan, Japan, Turkey and South Korea, allowing them to temporarily continue buying Iranian oil, Secretary of State Mike Pompeo said on Monday. Some of these are OPEC member Iran's top customers.
U.S. officials have said the aim of the sanctions is eventually to stop all Iran's oil exports.
Pompeo said more than 20 countries have already cut oil imports from Iran, reducing purchases by more than 1 million barrels per day.
Iran said on Monday it would break with the sanctions and continue to sell oil abroad.
China's foreign ministry expressed regret at the U.S. move.
Combined output from Russia, the United States and Saudi Arabia rose above 33 million bpd for the first time in October, up 10 million bpd since 2010, with all three pumping at or near record volumes.
Data from analysis firm Kayrros showed Iranian crude production was broadly unchanged in October from September, with barrels still hitting the market alongside additional production from Saudi Arabia and Russia.
GRAPHIC: Russian, U.S. & Saudi crude oil production (https://tmsnrt.rs/2CTwqaq)
GRAPHIC: Crude oil prices have fallen since October (https://tmsnrt.rs/2P8BZsZ)
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