Oil drops 1% as US plans to give some waivers to Iran's brutal sanctions

SINGAPORE (Reuters) – Brent crude oil prices fell more than 1 percent Monday after Washington announced its intention to grant waivers to sanctions against Iranian oil exports next month.

The international benchmark for Brent crude oil futures, LCOc1, was $ 83.25 per barrel at 0115 GMT, down 91 cents (1.1%) from their last close.

Futures contracts on WTI (West Texas Intermediate) CLc1 US futures fell 57 cents, or 0.8%, to $ 73.77 per barrel.

US sanctions will target Iran's crude oil exports starting Nov. 4, and Washington is pressuring governments and businesses around the world to reduce their imports to zero.

However, a US government official said Friday that the country could consider exemptions for countries that have already shown efforts to reduce their imports of Iranian oil.

Hedge funds have pulled their bullish bets on US crude in the last week at the lowest level in almost a year, data revealed on Friday.

Stephen Innes, trade manager for the Asia-Pacific region at Oanda in Singapore, said there were also "rumors that Saudi Arabia would have replaced all the oil lost in Iran."

But Innes warned that limited spare production to deal with further supply disruptions meant "capacity is shrinking rapidly due to insatiable demand from Asia".

The number of oil rigs in the United States has declined for a third consecutive week as rising costs and bottlenecks in pipelines hampered new drilling since June.

Drillers cut off two oil rigs in the week until October 5, bringing the total number to 861, energy services firm Baker Hughes announced in its weekly report Friday. RIG-OL-USA-IHB

This is the longest series of weekly cuts since last October.

While sanctions against Iran are still on the table, potential unused capacity constraints and the slowdown in drilling activity in the United States, the US bank JPMorgan said in its latest outlook regarding cross-asset lending. 39; assets that he recommended to "stay long". ".

(Graph: number of American oil platforms – tmsnrt.rs/2OJ4k8l)