Oil prices wavered as Brent and US West Texas Intermediate (WTI) futures rose on account of expectations of a resolution of the ongoing trade dispute between the US and China, before being pulled down by a US report.
The report suggested that the US had granted waivers to several nations on Iran sanctions, allowing them to buy some crude from the major oil producer.
Front-month Brent crude futures fell 1% to stand at $72.88 a barrel, while WTI crude futures dipped 33 cents, or 0.5%, to reach $63.36, Reuters reported.
Brent futures encountered fluctuations, falling in a previous session due to soaring supplies, before rising with global markets and then declining again after Bloomberg reported that Washington granted exemptions on Iranian crude imports to eight countries.
The exemption would allow these countries, including South Korea, Japan and India, to purchase some crude from the Middle Eastern nation even after the enforcement of sanctions as of 4 November.
Signs indicating that the Sino-US trade war would soon come to an end eased concerns that the prospect of a global economic slowdown would affect oil demand.
An unnamed Chinese official told Reuters that Beijing is currently engaged in talks with Washington and that the outcome could be known over the next couple of days.
The US Administration is expected to officially make public a list of all countries set to benefit from the waivers on Monday, the news agency added citing industry sources.
However, analysts pointed out that such Iranian oil sanction waivers would likely be temporary relief.
US bank Goldman Sachs projected that Iran’s crude oil exports would decline to 1.15 million barrels per day (Mbbl/d) by the end of the year from levels of around 2.5Mbbl/d recorded in mid-2018.
Goldman Sachs said: “We still expect that the global oil market will be in deficit in 4Q18.”
The bank added that Brent is likely to fall to $65 a barrel, on the back of what it said: “The unleashing of Permian (US shale) supply growth once new pipelines come online.”
Despite the slump in supplies from Iran, other nations have raised production significantly in the past two months.
Data available with Russian Energy Ministry indicated that the country produced 11.41Mbbl/d of crude oil during last month, which represents the highest levels in 30 years. The figures for September stood at 11.36Mbbl/d.
Production from the Organization of the Petroleum Exporting Countries (OPEC) during the same period rose to 33.31Mbbl/d, as revealed by a Reuters survey this week, marking an increase of 390,000bbl/d from the previous month.