Oil prices ease

LONDON. — Oil prices and calendar spreads have softened significantly this month as traders became more confident about the availability of supplies towards the end of the year and into early 2019.

Iran’s exports have not declined as much as predicted a couple of months ago and it is now clear they will not fall to zero, even after US sanctions are re-imposed next month.

Refiners in Turkey, India and possibly China are reportedly negotiating with US officials over waivers to enable them to continue purchasing at least some Iranian oil after November 4.

At the same time, Saudi Arabia and other Gulf producers have boosted their exports in response to the earlier rise in prices and pressure from the United States to cool the market.

Traders, meanwhile, have become more cautious about the consumption outlook for the rest of 2018/19, with most indicators pointing to a loss of economic momentum outside the United States.

As a result, most major forecasters are now predicting a significant acceleration in non-OPEC oil supplies in 2019 as well as slower growth in consumption, shifting the outlook from one of continuing deficits back towards a surplus.

In part, the improved supply picture has come about because the surge in oil prices during August and September forced both the White House and Saudi Arabia to adapt their positions.

The United States has softened its insistence on forcing Iran’s exports towards zero, while Saudi Arabia has ramped up its own exports in October and November to alleviate fears about a possible shortage.