SINGAPORE (5 November): oil prices fell on Monday as US sanctions against Iranian fuel exports eased the exemptions that will allow some countries to continue to import Iranian oil, at least temporarily.
Brent forward contracts for the first month of LCOc1 were $ 72.39 per barrel on Monday by 0142 GMT, 44 cents less, or 0.6 percent from the last closure.
Raw futures on WTC futures in West Texas (WTI) fell by 53 cents, or 0.8 percent, to 62.61 USD per barrel.
Brent lost over 16 percent of its value since early October, while WTI has dropped by more than 18 percent since then.
It came to the fact that traders reduced their betting on crude futures to one year by the end of October, the fifth in the fall in the month when prices fell the biggest since July 2016, data showed on Friday.
Prices were under pressure because it became clear that Washington allowed several countries to continue importing oil from Iran despite the sanctions that officially began on Monday.
The United States announced on Friday that it would allow eight importers temporarily to buy Iranian oil when it again imposed sanctions aimed at forcing Iran to reduce its nuclear, missile and regional activities.
Washington has not yet named eight, called "jurisdictions", a term that may include Taiwan, which the United States does not consider a country.
China, India, South Korea, Turkey, Italy, United Arab Emirates and Japan are the most important importers of Iranian oil, while Taiwan from time to time purchases Iranian oil, although it is not a significant buyer.
Oil markets have been preparing for sanctions for months.
"Iranian exports and production have been steadily declining … Iran's exports are dropping from more than 1 million barrels a day in May," said Edward Bell of the Emirates NBD.
On the demand side, Bell warned that consumption may slow down due to the economic slowdown, which can be seen in the sharp decline in refining profits.
"The weakening of refining margins in times of weak oil prices sends us a very eloquent message that demand is lower," he said.
The slowdown in demand would happen as production increased.
The combined production of the world's largest producers – Russia, the United States and Saudi Arabia – in October increased for the first time over 33 million barrels a day, by 10 million barrels a day since 2010.
These three countries alone meet more than one third of consumption.
In the Middle East, the Abu Dhabi National Oil Company (ADNOC) plans to increase its oil production capacity to 4 million barrels per day by the end of 2020 and 5 million barrels per day by 2030, ADNOC reported on Sunday, compared to current production value just over 3 million bpd.