Oil slips after industry reports larger than expected United States build

A Chinese vessel approaching beleaguered Iranian tanker Sanchi to help extinguish a fire that started after it collided with a Chinese vessel off China's shores

A Chinese vessel approaching beleaguered Iranian tanker Sanchi to help extinguish a fire that started after it collided with a Chinese vessel off China's shores

Of course, it is unclear how long the less-hawkish U.S. stand on Iran will continue.

Portfolio managers have been net sellers of 371 million barrels since the end of September, taking their net long position to the lowest level for 15 months, according to records published by regulators and exchanges.

USA bank J.P. Morgan said "part of the recent sell-off in oil was due to excessive crude in the physical markets.from elevated production from OPEC whilst Iranian supply was still in the market despite reduction in reported exports". The oil import bill for the current financial year, 2018-19, is expected to rise to $125 billion, i.e., by 42 per cent.

The WTI crude oil is trading slightly bearish a day after Washington allowed sanction waivers to top buyers of Iranian oil.

While crude oil prices somewhat strengthened in early morning trade on news that Russian Federation and Saudi Arabia were in talks to cut down crude output next year, oil prices pared earlier gains once the U.S. Energy Information Administration revealed domestic crude inventories rose 5.8 million barrels last week, or more than double expectations, Reuters reports.

Japan and South Korea, close USA allies, had toed the Washington sanctions line and stopped buying crude from Iran.

U.S. government waivers will allow some of Iran's biggest customers to buy crude from Opec's No. 3 producer for another six months, damping shortage fears.

Even China, locked in a bitter trade war with the United States, bowed to pressure from Washington and dialed back imports.

"Any serious discussion will be toward the December meeting", this source said.

One Indian source close to the country's refining sector said India would likely be allowed to import around 300,000 bpd of Iranian crude during the exemption period compared with normal volumes of around 450,000 to 550,000 bpd.

Iran late a year ago inaugurated the port on the Indian Ocean, which is being built largely by India and is expected to provide a key supply route for Afghanistan while allowing India to bypass rival Pakistan to trade with Central Asia and Africa.

"Some OPEC members of these two committees have clearly taken sides with the (United States) in imposing its unilateral and unlawful sanctions against".

The exemption for Chabahar comes as good news for India and Afghanistan, but undercuts the Trump administration's portrayal of the sanctions as the "toughest ever".

The United States restored sanctions on Iran's energy, banking and shipping industries on Monday.

Brent crude had dropped from a four-year high in October above $86 a barrel to $71 on Tuesday.

"If Iranian tankers make calls to your ports or transit through your waterways, this comes at great risk", Brian Hook, the State Department's special representative on Iran policy told journalists.

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