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Oil prices extend falls on well supplied market, Iran sanction waivers

Published 07/11/2018, 11:55 am
Updated 07/11/2018, 12:00 pm
© Reuters.  Oil prices extend falls on well supplied market, Iran sanction waivers
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* Brent crude down by over 17 pct since Oct, WTI down 20 pct

* Oil production rising in U.S., OPEC, Russia

* Top-3 oil producers: https://tmsnrt.rs/2Rua0R8

* Iraq plans output rise to 5 mln bpd in 2019

* U.S. grants Iran's biggest customers sanction waivers

By Henning Gloystein

SINGAPORE, Nov 7 (Reuters) - Oil prices fell on Wednesday to extend losses from the previous session, with markets well supplied amid rising production and U.S. sanction waivers that allow Iran's biggest customers to continue buying its crude.

U.S. West Texas Intermediate (WTI) crude oil futures CLc1 were at $61.79 per barrel at 0053 GMT, down 42 cents, or 0.7 percent, from their last settlement.

International benchmark Brent was yet to trade.

The increasingly well supplied market has turned sentiment, which until early October was largely bullish, pushing Brent to four-year highs of more than $86 per barrel ahead of the Iran sanctions.

Brent and WTI have lost 17.4 and 19.7 percent in value respectively from their most recent peaks in early October.

Fawad Razaqzada, market analyst at futures brokerage Forex.com, said he had become "quite bearish on oil prices".

Razaqzada pointed to lower demand growth forecasts, higher supply and Iran sanctions waivers to most its biggest buyers which would allow its crude exports "to remain around their current levels for a good few months still". bank Morgan Stanley (NYSE:MS) said "oil market fundamentals have softened (as) supply continues to come in higher-than-expected, particularly from the U.S., Middle East OPEC, Russia and Libya."

Output from the world's top-3 producers Russia, the United States and Saudi Arabia, broke through 33 million barrels per day (bpd) for the first time in October, meaning these three countries alone now meet more than a third of the almost 100 million bpd of global consumption.

Iraq, the second-largest producer within the Organization of the Petroleum Exporting Countries (OPEC) behind Saudi Arabia, is targeting production capacity of 5 million bpd in 2019, up from 4.6 million bpd currently, Oil Minister Thamer Ghadhban said on Tuesday. market is well supplied, and we see a balanced rather than tight market ahead. This no longer supports our $85 per barrel year-end and 1H19 forecast," Morgan Stanley said.

Instead, the bank said it expected Brent to average around $77.5 per barrel to mid-2019.

With production rising, crude inventories are also swelling.

U.S. crude stocks climbed by 7.8 million barrels in the week ending Nov. 2 to 432 million, data from industry group the American Petroleum Institute showed on Tuesday. the increasingly well supplied market, Razaqzada warned that it was becoming "increasingly costly for inefficient producers to maintain output at current levels".

Venezuela's crude production was in "free-fall" and could soon drop below 1 million bpd, the International Energy Agency's Executive Director Fatih Birol warned on Tuesday, down from the more than 2 million bpd it averaged last year. GRAPHIC: Russian, U.S. & Saudi crude oil production

https://tmsnrt.rs/2CTwqaq

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