Brent crude drops below $83 on expectations Iran will maintain some exports

OIL DERRICKS

OIL DERRICKS

U.S. West Texas Intermediate (WTI) crude futures rose 67 cents to settle at $74.96 a barrel, a 0.90 percent gain.

While Washington has said it wants to cut Iran's oil exports to zero, Iran and Saudi Arabia say that is unlikely.

A United States government official said on Friday that the administration was considering waivers on Iran's oil sanctions.

Refiners have already announced purchases of oil from Iran for November at levels nearly similar to those in October, despite the start of the sanctions on the 4 November.

That's down from at least 2.5 million bpd in April, before President Donald Trump in May withdrew the USA from a 2015 nuclear deal with Iran and reimposed sanctions. Brent crude on Wednesday last week reached $86.74 a barrel, the highest since 2014.

Some veteran Iran watchers cautioned against criticizing the administration for its decision to consider oil waivers, telling the Free Beacon it is very hard for nations to cut their imports to zero in the matter of months. Data also pointed to Iran oil reserves being run down ahead of sanctions which is likely to underpin prices in the weeks ahead.

In a sign that Iran oil exports won't fall to nothing from November, India will buy 9 million barrels of Iranian crude next month, Reuters reported on Friday. USA light crude was up 45 cents at $74.74.

Reeling from high oil prices, India has also reminded Saudi Arabia of the promise by the Organization of the Petroleum Exporting Countries (Opec) of increasing production by an additional 1 million barrels per day, said Pradhan. "We have ordered for our usual quantity of oil", he said while adding that they were discussing payment options.

Prince Mohammed told Bloomberg on Friday that the kingdom had met its promise to Washington to make up for Iranian oil supplies lost through USA sanctions, reimposed when the United States exited a 2015 nuclear deal between Tehran and six powers.

But Innes warned that limited spare production to deal with further supply disruptions meant "the capacity is quickly declining due to Asia's insatiable demand".

Gulf of Mexico oil companies shut down 19 percent of oil production as Hurricane Michael moved toward eastern Gulf states including Florida.

If forecasts prove accurate, the hurricane would largely miss major oil-producing assets, analysts said, but a change of track could widen the impact. Late in the session, traders will get the opportunity to react to the latest data from the American Petroleum Institute.

The International Monetary Fund on Tuesday cut its global economic growth forecasts for 2018 and 2019, saying trade tensions and rising import tariffs were taking a toll on commerce while emerging markets struggle with tighter financial conditions and capital outflows.

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