Gulf News

US sanctions stance sees oil prices slip

Eight countries allowed waiver in tapping Iranian oil exports

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Oil fell to a six-month low as the US softened its crackdown on Iranian exports and American supplies surged, assuaging fears of an impending shortage. Futures dropped 0.7 per cent in New York, taking the weekly loss to 6.4 per cent, the biggest since February.

The US has let eight countries — including Japan, India and South Korea — keep buying Iranian oil after it reimposes sanctions to prevent a spike in prices, an administra­tion official said. China — the leading importer of Iranian oil — is still in discussion­s with the US on terms, but is among the eight countries.

Oil’s autumn rally, which culminated in a four-year high last month, has unravelled as a rout in global equities fans concerns that fuel demand will suffer, and prices are now approachin­g a bear market. Earlier fears that US sanctions on Iran could result in a crude shortage are also receding, as the US shale boom gains new momentum and the Trump administra­tion vacillates on how aggressive­ly to target Iranian exports.

Oversupply fears

“The market has moved from expectatio­ns of massive supply scarcity in the fourth quarter to quite opposite expectatio­ns of a looming oversupply,” said Eugen Weinberg, head of commoditie­s research at Commerzban­k AG. “The focus has shifted, leading to a sell-off by hedge funds, and that’s causing the slide.”

Brent for January settlement slipped 28 cents to $72.61 (Dh266) a barrel on London-based ICE Futures Europe exchange. The contract is down 6.5 per cent in

The Indian rupee yesterday clocked its biggest single-day gain in over five years, surging by 100 paise to close at 72.45 against the US dollar on easing crude oil prices and the US granting of waiver to India from sanctions on Iranian oil imports.

Besides, a bullish trend in equity market and fresh foreign fund inflows supported the domestic currency, witnessing a massive 150 paise rise in the last two trading sessions.

The currency had on Thursday gained 50 paise.

At the Interbank Foreign Exchange (Forex) market, the domestic unit yesterday opened on a higher note at 73.14, then gained further ground and touched an intra-day high of 72.43, a jump of 102 paise.

It, however, closed at 72.45 against the dollar, showing a rise of 100 paise — the best day for the Indian unit since September 2013. the week, a fourth consecutiv­e week of declines. The global benchmark crude traded at $9.23 premium to WTI for the same month.

Opec increased output by 430,000 barrels to 33.33 million barrels a day in October, the highest since 2016, a Bloomberg survey said. Saudi Arabia raised production by 150,000 barrels to 10.68 million a day, the highest going back to 1962, while Iranian volumes slipped by 10,000 barrels a day to 3.42 million.

“People are less concerned about breaching capacity constraint­s,” Jeffrey Currie, head, commoditie­s research at Goldman Sachs Group, said. Brent is still set to hit $80 by year-end as “we’re just beginning to see the Iranian cuts begin to impact inventorie­s”.

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