Oil prices declined Tuesday, a day after the Trump administration granted waivers to allow eight nations to continue buying Iranian crude despite U.S.-driven economic sanctions against the Islamic Republic.
News reports said President Donald Trump on Monday told reporters that he wants to “go a little bit slower” when it comes to sanctions on Iranian oil because he doesn’t walk to drive up oil prices. That also helped to ease worries about tighter global supplies.
The rollercoaster for the oil market “has decelerated not halted, as U.S. grants waivers to eight jurisdictions with some amount of obscurity to continue importing oil from Iran,” Ashray Ohri, an analyst at ICICI Bank, wrote in a note dated Tuesday.
At the same time, however, the Joint OPEC-Non-OPEC Ministerial Monitoring Committee “grows wary of demand at a time the three largest crude producers in the world are boosting their output to record highs,” Ohri said. JMMC officials monitor implementation of crude output agreement that began on Jan. 1, 2017 between members and nonmembers.
West Texas Intermediate crude for December CLZ8, -1.55% fell 85 cents, or nearly 1.4%, to $62.25 a barrel on the New York Mercantile Exchange. Prices were on track to log a seventh straight decline. January Brent crude LCOF9, -1.60% the global benchmark, fell $1.24, or 1.7%, to $71.93 a barrel on ICE Futures Europe.
Both contracts have generally traded in the red following a sharp October selloff that pushed both the global and U.S. benchmarks into correction territory.
The renewed sanctions on Iran took effect Monday, but the Trump administration late last week announced temporary waivers to eight countries, which it identified as some of Iran’s biggest oil buyers: China, India, Italy, Greece, Japan, South Korea, Taiwan and Turkey.
“These countries take on the lion’s share of Iranian oil exports,” according to analysts at Commerzbank. “This is bad news for oil prices, as it means the supply situation on the oil market is set to ease further,” the analysts wrote in a note Tuesday.
See: Here’s what U.S. waivers on Iran oil sanctions mean for the global crude market
And: Defiant Iranian president promises to ‘break’ new U.S. sanctions
Don’t miss: Why oil prices are plunging despite U.S. sanctions on Iran’s energy sector
Trump in May pulled the U.S. out of a 2015 international agreement to curb Iran’s nuclear program, eventually leading to the reimposition of sanctions. But the well-telegraphed move prompted buyers of Iranian crude to reduce their purchases in the run-up to the sanctions, helping to reduce global supply and boosting Brent oil prices to four-year highs near $85 a barrel at the start of last month. That was before a near 15% retreat ensued.
As for data, the American Petroleum Institute, an industry group, releases weekly figures later Tuesday on U.S. oil inventories, followed by official data from the Energy Information Administration Wednesday.
Analysts polled by S&P Global Platts expect the EIA to report a rise of 1.9 million barrels in crude stockpiles for the week ended Nov. 2. The EIA has already reported increases in each of the last six weeks. The survey also forecasts supply declines of 2.1 million barrels for gasoline and 2.03 million barrels for distillates, which include heating oil.
On Nymex, December gasoline RBZ8, -0.21% fell 0.3% to $1.687 a gallon, while December heating oil HOZ8, -0.55% was down 0.3% at $2.189 a gallon.
Separately, the EIA was also set to release its latest short-term energy outlook Tuesday.
Meanwhile, natural-gas futures held ground near a multimonth high, after jumping nearly 9% higher Monday, buoyed by expectations that cold weather will lead to a significant lift in demand.
December natural gas NGZ18, -0.67% was little changed at $3.568 per million British thermal units. It settled Monday at $3.567—the highest finish for a front-month contract since late January.
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