Oil declines on hopes for U.S. waivers on Iran, Saudi assurance
Pubdate：2018-10-09 11:11
Source：liyanping
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LONDON (Bloomberg) -- Oil fell to the lowest in a week in London on renewed hopes the U.S. may soften the blow of sanctions on Iran’s crude exports, and as Saudi Arabia promised to fill any shortfall.
Brent futures fell 1.3% to near $83/bbl, after retreating 2.5% over the past two sessions. The U.S. was said to be in talks with countries that want to continue buying from Iran after American sanctions are imposed Nov. 4. Saudi Arabia and its allies have raised output to offset declining supply from the Persian Gulf nation and the kingdom can tap its spare capacity immediately to boost production further, the Saudi crown prince said in an interview.
Oil rallied to the highest in almost four years earlier this month on concerns that OPEC and its allies aren’t raising output quickly enough to make up for the squeeze on Iranian shipments. U.S. law doesn’t rule out waivers for some buyers of crude from the Persian Gulf nation, but the Trump administration hasn’t granted any since deciding to reimpose sanctions in May. Renewed signals that America could allow some purchases to continue are helping to ease supply fears.
“The U.S. appears to be abandoning its tough stance on buyers of Iranian oil,” said Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt.
Price drops
Brent for December settlement fell as much as $1.50 to $82.66/bbl on the London-based ICE Futures Europe exchange, and was at $83.05 at 1:30 p.m. in London. The global benchmark crude traded at a $9.77 premium to West Texas Intermediate for the same month.
WTI for November delivery traded at $73.33/bbl on the New York Mercantile Exchange, down 1.4%. Total volume traded was about 5% below the 100-day average.
Following U.S. President Donald Trump’s pressure to tame surging prices, Saudi Arabia’s Crown Prince Mohammed Bin Salman said the world’s top oil exporter is doing its part by pumping near record levels. Output by OPEC’s top producer is now at about 10.7 MMbpd, and it can add a further 1.3 million from its spare capacity “if the market needs that,” he said in the interview.
Meanwhile, the Trump administration was in discussions with countries that want to continue buying Iranian oil after sanctions are reimposed early next month, according to two U.S. officials. One of them said China may cut back by more than expected, while India remains a wild card. Another official said various nations have sought waivers and these were being considered, though America was not looking to grant exemptions.
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