An employee works on at the Centenario deep-water oil platform in the Gulf of Mexico off the coast of Veracruz, Mexico. Picture: REUTERS
An employee works on at the Centenario deep-water oil platform in the Gulf of Mexico off the coast of Veracruz, Mexico. Picture: REUTERS

London — Oil prices slipped further on Friday, heading for a weekly loss of more than 6%, after a report that Washington has granted several countries waivers on sanctions on Tehran, allowing them to continue to import Iranian crude.

Benchmark crude oil was down 20c a barrel at $72.69 by 9am GMT. The contract has fallen 12% since the beginning of October. US light crude was 25C lower at $63.44, down more than 13%  since hitting four-year highs a month ago.

Global markets, including oil, were lifted earlier on Friday by hopes that the trade dispute between the world’s two biggest economies could be resolved soon. But sentiment turned negative after a report that several governments received waivers that would allow them to import some Iranian crude once US sanctions are imposed next week.

The US government has agreed to let eight countries, including close allies South Korea and Japan, as well as India, keep buying Iranian oil after it re-imposes the sanctions, Bloomberg reported on Friday, citing a US official.

“Oil prices sold off sharply ... on news that the US administration would grant waivers for oil imports from Iran,” Goldman Sachs analysts said in a note to clients.

A list of all countries getting waivers is expected to be released officially on Monday, several industry sources said. Despite these efforts, analysts said any potential Iranian oil sanction waivers would likely only be temporary.

Goldman Sachs said it expects Iran’s crude oil exports to fall to 1.15-million barrels per day (bpd) by the end of the year, down from around 2.5-million bpd in mid-2018.

Beyond Iran sanctions, oil output has been rising significantly in the past two months. Russian energy ministry data showed on Friday that the country pumped 11.41-million bpd of crude oil in October, a 30-year high.

Oil cartel Opec boosted oil production in October to 33.31-million bpd, up 390,000 bpd and the highest by Opec since 2016. And in the US, crude production is now well over 11-million bpd, putting the US in a neck and neck race with Russia for the title of top producer.

By the end of next year, however, Goldman expects Brent to fall to $65 a barrel, largely due to “the unleashing of Permian [US shale] supply growth once new pipelines come online”.

Reuters

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