Home / International/ Oil drops as US considers granting some waivers on Iran crude sanctions

Oil drops as US considers granting some waivers on Iran crude sanctions


Comments / {{hitsCtrl.values.hits}} Views / Tuesday, 9 October 2018 00:00


 

SINGAPORE (Reuters): Brent crude oil prices fell more than 1% on Monday after Washington said it may grant waivers to sanctions against Iran’s oil exports next month, and as Saudi Arabia was said to be replacing any potential shortfall from Iran.

International benchmark Brent crude oil futures LCOc1 were at $ 83.26 per barrel at 0352 GMT, down 90 cents, or 1.1%, from their last close.

US West Texas Intermediate (WTI) crude futures CLc1 were down 54 cents, or 0.7%, at $ 73.80 a barrel.

US sanctions will target Iran’s crude oil exports from 4 November, and Washington has been putting pressure on governments and companies worldwide to cut their imports to zero.

However, a US Government official said on Friday that the country could consider exemptions for nations that have already shown efforts to reduce their imports of Iranian oil.

In a sign that Iran oil exports won’t fall to nothing from November, India will buy nine million barrels of Iranian crude next month, Reuters reported on Friday.

Hedge funds cut their bullish wagers on US crude in the latest week to the lowest level in nearly a year, data showed on Friday.

Traders said ongoing concerns that the US-Chinese trade war could slow down economic growth also weighed on crude on Monday.

China’s stocks fell sharply on Monday despite an announcement from Beijing over the weekend that it would slash the level of cash that banks must hold as reserves, a sign of underlying investor anxiety over the heated Sino-US trade war.

Further weighing on oil prices was “chatter that Saudi Arabia has replaced all of Iran’s lost oil”, said futures brokerage Oanda, Singapore, Head of Trading for Asia-Pacific Stephen Innes.

But, Innes warned that limited spare production to deal with further supply disruptions meant “the capacity is quickly declining due to Asia’s insatiable demand”.

The US oil drilling rig count fell for a third consecutive week, as rising costs and pipeline bottlenecks have hindered new drilling since June.

Drillers cut two oil rigs in the week to 5 October, bringing the total count down to 861, energy services firm Baker Hughes said in its weekly report on Friday. That is the longest streak of weekly cuts since October last year.

With Iran sanctions still on the table, potential spare capacity constraints and also a slowdown in US drilling, US bank J. P. Morgan said in its latest cross-asset outlook for clients that it recommended to “stay long January ‘19 WTI on supply risks to crude”.


Share This Article


DISCLAIMER:

1. All comments will be moderated by the Daily FT Web Editor.

2. Comments that are abusive, obscene, incendiary, defamatory or irrelevant will not be published.

3. We may remove hyperlinks within comments.

4. Kindly use a genuine email ID and provide your name.

5. Spamming the comments section under different user names may result in being blacklisted.

COMMENTS

Today's Columnists

Overcoming the crisis: The second freedom struggle

Friday, 14 December 2018

The crisis that has been developing in Sri Lanka, manifesting itself in varied forms at different times since independence, has now taken the form of a constitutional crisis, threatening the survival of the Sri Lankan State. Regardless of the Court


Getting more women in the workforce

Friday, 14 December 2018

The current female labour force participation in Sri Lanka is around 36%. This means that a disproportionate majority of women still remain outside the labour market, with limited or no access to wages, pensions and other benefits tied to gainful emp


Our chit-chat – Can conversations make a nation?

Thursday, 13 December 2018

We are living through fascinating times dominated by online conversations with offline taking backstage. From the Arab spring to Yellow vests in France, the online has proven its potential and power – be it destructive or constructive! A reading o


The vote, the verdict, and the TNA ‘backstop’: Beyond ’56

Thursday, 13 December 2018

“Leader of PLOTE and TNA MP D. Dharmalingam …stated that he believes that Ranil Wickremesinghe has handed in a written assurance of several promises. …The promises are said to include agreements on constitutional amendments, freedom for politi


Columnists More