Economy

Oil falls after US softens stance on Iranian sanction waivers

Oil falls after US softens stance on Iranian sanction waivers”

However, the recovery in North American benchmark price indicator has not translated into higher offers for USA grades in the Asian spot market, with various light sweet United States crude cargoes remaining competitive against Brent-linked Southeast Asian grades, as well as Dubai-linked Far East Russian and Middle Eastern spot cargoes. Earlier, the global benchmark hit a session high of $79.51. US crude CLc1 fell $3.73, or 5 percent, to $70.38 a barrel.

The decline in overall inventories was partially due to a fall-off in stocks at the Cushing, Oklahoma, delivery hub USOICC=ECI for US crude futures, which were down by 2.1 million barrels. That decline was larger than expected, causing crude futures to gain in post-settlement trading.

The front-month ICE Brent/NYMEX spread fell as low as minus $11.33/b on June 8, but the spread recovered to minus $6.47/b Friday 0830GMT, Platts data showed. The outage in Libya had helped drive up oil prices over the past few weeks, fueling speculation that Saudi Arabia would need to burn through much of its spare capacity in order to keep the market well-supplied.

All three major stock indexes were up, with the S&P 500 at a four-month high.

Still, there are already signs the threat of the renewed USA sanctions are discouraging some Asian countries from buying Iranian crude. "The impact could spread to many other countries", lowering global crude consumption, she said. Close American allies such as South Korea and Japan are grappling with how to sustain their ties with the USA without jeopardising their energy industry as well as their relationship with long-time crude supplier Iran. "Is it India?. Is it temporary waivers?"

The United States says it wants to reduce oil exports from Iran, the world's fifth-biggest producer, to zero by November, which would oblige other big producers to pump more.

Hundreds of workers on Norwegian offshore oil and gas rigs went on strike on Tuesday after rejecting a proposed wage deal, leading to the shutdown of one Shell-operated oil field.

The reopening will allow the return of up to 850,000 barrels per day of high quality crude oil to worldwide markets.

Libya's national oil production fell to 527,000 barrels per day from a high of 1.28 million bpd in February following recent oil port closures, the head of the National Oil Corporation said in a statement on Monday.

The updated timeline has muted US price gains and widened the difference between the two benchmarks, said Yawger.

The Organization of the Petroleum Exporting Countries (OPEC) crude oil production averaged 31.9 million barrels per day in June.



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