Oil prices dipped again early Tuesday after the Trump administration a day earlier granted waivers to allow eight nations to continue buying Iranian crude as U.S.-driven economic sanctions against the Islamic Republic kicked in.
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 helped to ease worries about tighter global supplies.
West Texas Intermediate crude for December CLZ8, -0.43% fell 31 cents, or 0.4%, to $62.79. Prices were on track to log a seventh straight decline. January Brent crude LCOF9, -0.60% the global benchmark, fell 52 cents, or 0.7%, to $72.65 a barrel.
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 took effect Monday, but the Trump administration late last week announced it granted temporary waivers to eight countries, which it identified Monday 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 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. The EIA is also set to release its latest short-term energy outlook Tuesday
Meanwhile, natural-gas futures pulled back after they jumped nearly 9% Monday, buoyed by expectations that cold weather will lead to a significant lift in demand. Early Tuesday, December natural gas NGZ18, -0.64% had slipped 0.8% to $3.541 per million British thermal units. The contract settled Monday at $3.567—the highest finish for a front-month contract since late January.
December gasoline RBZ8, -0.35% fell 0.3% to $1.687 a gallon, while December heating oil HOZ8, +0.11% was little changed at $2.1962 a gallon.
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