Oil seesaws on reported Iran sanctions waivers, hopes US-China trade spat can be resolved

SINGAPORE (Reuters) – United States and China can resolve their trade disputes soon, before being weighed down by a report.

Front-month Brent crude futures were at $ 72.88 per barrel at 0737 GMT on Friday, 1 cent below their last close. They have been dropping on the back of the Iran sanctions waivers.

U.S. West Texas Intermediate (WTI) crude futures were down 33 cents, or 0.5 percent, at $ 63.36 a barrel.

Global markets, including oil, were soon to be resolved soon.

Pulling crude back down, however, was a report that several governments had received waivers that would still allow countries to import some Iranian oil U.S. sanctions are reimposed from next week.

The United States and South Korea, including close allies in South Korea and Japan, India, Iranian oil aid, Bloomberg reported on Friday, citing U.S. official.

A Chinese official told Reuters that discussions with the U.S. government were ongoing and that this was expected over the next couple of days.

A list of all countries is expected to be released on Monday, several briefed industry sources said.

Despite these efforts, analysts said any potential Iranian oil penalty waivers would be unlikely to be temporary.

Goldman Sachs said it expects Iran's crude oil exports to fall to 1.15 million bpd by the end of the year, down from around 2.5 million bpd in mid-2018.

"We still expect the global oil market to be in deficit in 4Q18," the U.S. bank said.

By the end of 2019, however, Goldman expects Brent to fall to $ 65 a barrel, largely due to "the unleashing of Permian (U.S. shale) supply growth ounce new pipelines as online."

SUPPLY SURGE

Beyond Iran sanctions, which has increased significantly in the past two months.

11.41 million barrels per day (bpd) of crude oil in October, a 30-year high, and up from 11.36 million bpd in September.

The Middle East-dominated Organization of the Petroleum Exporting Countries (OPEC) boosted oil production in October to 33.31 million bpd, a Reuters survey found this week, up 390,000 bpd from September and the highest by OPEC since December 2016.

In the United States, crude production has established itself well over 11 million bpd, putting the U.S. in a neck and neck race with Russia for the title of top producer.

With Saudi Arabia pumping 10.65 million bpd in October, combined output of the top-three oil producers is at a record 33.41 million bpd, meaning that Russia, the United States and Saudi Arabia meet more than a third of the world's almost 100 million bpd of consumption.

"This surge has driven the market into oversupply," Jefferies said.

Graphic: Russian, U.S. & Saudi crude oil production – tmsnrt.rs/2CTwqaq