Thursday, 18 October, 2018

Relief for Iran oil consumers as United States indicates waivers on the way

Relief for Iran oil consumers as US indicates waivers on the way Relief for Iran oil consumers as United States indicates waivers on the way
Nellie Chapman | 09 October, 2018, 11:57

The United States plans to impose new sanctions targeting Iran's oil sector on November 4, however a USA government official said the Trump administration is "in the midst of an internal process" of considering waivers for countries that are reducing imports of Iranian crude.

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

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-U.S. trade war.

Hedge funds cut their bullish wagers on US crude in the latest week to the lowest level in almost a year, data showed on Friday. On the New York Mercantile Exchange, West Texas Intermediate futures were trading down 1.20% at $73.45 a barrel.

India will buy a total of 9 million barrels of oil from Iran in November, foreign media reported yesterday, citing an industry source, despite U.S. sanctions on Tehran to return early next month.

Delhi is hopeful that Saudi Arabia and other members of the Organization of Petroleum Exporting Countries will heed USA calls for production to be boosted by one million barrels per day, as promised in June, which might help bring benchmark prices down. The figure also marks a further fall from 1.6 million bpd in September.

Last week, Saudi Arabia, the biggest producer among the Organization of the Petroleum Exporting Countries (OPEC), announced plans to lift crude output next month to 10.7 million bpd, a record.

White House National Security Advisor John Bolton said only last week that the administration wanted to avoid all waivers and see Iranian oil and gas exports entirely staunched, but that it might not be able to achieve that aim.

For India, reeling under oil price hike and the burden of depreciating rupee, continued flow of Iran oil even as sanctions kick in on November 4 would be a great relief.

While Washington has said it wants to cut Iran's oil exports to zero, Iran and Saudi Arabia say that is unlikely.

Meanwhile, oil companies operating in the Gulf of Mexico shut down almost 20 percent of oil production as Hurricane Michael moved toward eastern Gulf states including Florida.

If current forecasts prove accurate, the hurricane would largely miss major producing assets in the Gulf, analysts said, but any change of track could widen the impact.