Oil Declines on Hopes for U.S. Waivers on Iran, Saudi Assurance

International Court of Justice

Analysts said a weak trend in global market after the U.S. 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, weighed on crude futures here.

"Likely, India and Iran will agree to use Rupee payments instead of USA dollar payments, something already tried between 2013 and 2015, with Iran then using Rupees to import food, medicines and other commodities from India", said Leszczynski.

Brent for December settlement fell as much as $1.50 to $82.66 a barrel on the London-based ICE Futures Europe exchange, and was at $83.05 at 1:30 p.m.in London.

That is the longest streak of weekly cuts since October previous year.

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

Iran has warned that if it can not sell its oil due to US pressure, then no other regional country will be allowed to do so either, threatening to block the Strait of Hormuz.

"This is one of the single biggest supportive factors for crude", said analysts at JBC Energy of the U.S.re-imposition of Iran sanctions.

USA sanctions on Iranian oil purchases are due to take effect on November 4. "Having said that, it may well be that we are already in the most supportive phase coming from this change and the effect will soon begin to ease". He said that nine million barrels of oil are expected to be purchased.

Iran's Oil Minister Bijan Zanganeh has dismissed as "nonsense" claims by the Saudi crown prince that Saudi Arabia can replace sanctions-hit Iranian oil in the market.

India, however, wants to keep importing oil from Iran, because Tehran offers discounts and incentives for them at a time when the Indian government is struggling with higher oil prices and a weakening local currency.

Traders said ongoing concerns that the U.S.

Oil rallied to the highest in nearly 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.

Related:

Comments


Other news