Oil drops to about US $ 83 on Iran's forecast to maintain some exports

Oil dropped to about $ 83 a barrel on Monday, under pressure from forecasts that some Iranian oil exports would continue to flow after the US reprinted the sanctions, easing supplies.

Two Indian companies, a major buyer of Iranian oil, have ordered barrels in November, said Monday the Indian Minister of Petroleum.

The Trump administration is considering canceling the sanctions, a US government official said on Friday.

"In one way or another, it seems that India will seize Iranian crude," said Olivier Jakob of Petromatrix, adding that this development allowed oil to "trace part of the price hike seen last week. "

The international benchmark, Brent, fell from $ 1.07 to $ 83.09 per barrel to 0817 GMT. It hit a four-year high of $ 86.74 last week.

US crude fell 93 cents to $ 73.41.

US sanctions will target Iranian crude oil exports from Nov. 4, and Washington has lobbied governments and businesses around the world to reduce their imports to zero.

"This is one of the most important factors supporting crude oil," said JBC Energy analysts in the United States, who reimposed the sanctions imposed on Iran. "That being said, we may already be in the most favorable support phase resulting from this change and the effects will soon begin to ease."

Oil has also fallen as investors focus on increasing production from other producers, such as Saudi Arabia, the largest exporter, to offset the decline in Iranian supplies.

Saudi Arabia announced last week its intention to increase production by 10.7 million barrels a day in October, indicating that Riyadh would increase its supply to the highest level ever achieved.

"The fact that Saudi Arabia has replaced all the lost Iranian oil", weighs on prices, said Stephen Innes, Asia-Pacific Trade Manager at Oanda, a contract broker at term.

The concern that the US-China trade war may slow economic growth and weigh on oil demand has also weighed on the market, Asian traders said. Chinese stocks fell sharply on Monday.

Oil has been buoyed by concern that the loss of Iranian exports will leave a slimmer margin of spare production capacity to cope with supply shocks. Saudi Arabia holds the bulk of reserve capacity.

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