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SINGAPORE (Reuters) – Oil prices plummeted on Wednesday as production increases and US sanctions waivers allow Iran's major buyers to continue taking oil. gross, strengthen the prospects of a well-supplied market.
PHOTO FILE – Iraqi villagers drive their fishing boat in front of oil tanker Al-Baath in the Shat-al-Arab waterway, which leads to the port of Umm Qasr, near the country's second largest city, Basra, February 10, 2005 REUTERS / Atef Hassan
The Brent crude futures contract at the beginning of the month, LCOc1, was $ 72.04 per barrel at 0 337 GMT, down 9 cents (0.1%) from their last close.
CLc1 crude for West Texas Intermediate (WTI) crude in the United States was $ 61.92, down 29 cents or 0.5% from its latest regulation.
Brent and WTI fell 17.4% and 19.7% from recent highs in early October.
The US bank J.P. Morgan said that "the sale of oil was due to excessive crude" production rising "while the Iranian supply was still on the market".
Washington re-imposed Monday sanctions against Iranian oil exports, but granted waivers to its largest customers, allowing them to import limited quantities for the next 180 days.
Refinitiv Eikon's data showed that Iran's crude oil exports fell to 1 million barrels per day (bpd) in November, compared with about 3 million bpd in mid-2018.
But the Iranian bid is expected to rise after November, with waivers being used to start ordering more Iranian oil.
"The waivers will likely be more extensive than expected in the market," said energy consulting firm FGE, saying the waivers would globally export between 1.2 and 1.7 million bpd.
In addition, a fleet of super-tankers carrying about 9 million barrels of Iranian oil worth about $ 650 million is outside the port of Dalian, China.
Shipping data indicate that most ships have arrived in the last 30 days, with Iran attempting to bring as much rough into the markets as possible before the sanctions come into effect.
"With waivers, prices can be managed in a range of $ 70 to $ 80 a barrel, with a rise of about $ 85 a barrel and a $ 65 a barrel limitation," FGE said.
WAVE OF SUPPLY
Beyond Iran, the US bank Morgan Stanley said that "the supply continues to exceed expectations, especially that of the United States, OPEC Middle East, Russia and Libya. ".
Production of the world's top three producers, Russia, the United States and Saudi Arabia, surpassed 33 million bpd for the first time in October. These three countries now account for more than a third of global consumption.
Iraq, the second largest producer in the Organization of the Petroleum Exporting Countries (OPEC), plans to increase production to 5 million barrels per day in 2019, compared with 4.6 million barrels per day.
Observing the wave of new offers, Morgan Stanley has lowered its Brent price forecast for the first year and the first half of 2019 from 85 USD to 77.50 USD per barrel.
Inventories are also swelling.
US stocks of crude rose 7.8 million barrels during the week ending Nov. 2 to 432 million, according to data from the American Petroleum Institute published Tuesday.
According to J.P.Morgan "floating global storage has increased by 3.6 million barrels since July 18 to reach 33.9 million barrels".
Despite the well-stocked market, JP Morgan still warned that "the risk of supply remains very high" due to the geopolitical risk and the "lack of available capacity".
Part of this risk comes from Venezuela, where crude production is in "free fall" and could soon fall below the 1 million bpd mark, said Tuesday the executive director of the International Oil & Gas Agency. energy, Fatih Birol, against more than 2 million bpd in average year.
Report by Henning Gloystein; Edited by Joseph Radford and Tom Hogue
