Oil prices dip amid well-supplied market, Iran sanction waivers

US crude stocks climbed by 7.8 million barrels in the week ending Nov. 2 to 432 million, data from the American Petroleum Institute showed on Tuesday. (Reuters)
Updated 07 November 2018
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Oil prices dip amid well-supplied market, Iran sanction waivers

  • Washington re-imposed sanctions against Iran’s oil exports on Monday but granted waivers to its biggest customers
  • Output from the world’s top-three producers Russia, the US and Saudi Arabia, broke through 33 million bpd for the first time in October

SINGAPORE: Oil prices dipped on Wednesday as rising output and US sanction waivers that allow Iran’s biggest buyers to keep taking its crude reinforced the outlook for a well-supplied market.
Front-month Brent crude oil futures were at $72.04 per barrel at 0337 GMT, down 9 cents, or 0.1 percent, from their last close.
US West Texas Intermediate (WTI) crude was at $61.92, down 29 cents, or 0.5 percent, from its last settlement.
Brent and WTI have slumped by 17.4 and 19.7 percent from recent peaks touched in early October.
US bank J.P. Morgan said the “sell-off in oil was due to excessive crude” from rising production “whilst Iranian supply was still in the market.”
Washington re-imposed sanctions against Iran’s oil exports on Monday but granted waivers to its biggest customers, allowing them limited imports for the next 180 days.
Refinitiv Eikon data showed Iranian crude exports have fallen to 1 million barrels per day (bpd) so far in November, down from around 3 million bpd in mid-2018.
But Iran supply is expected to rise after November as waivers are used to start ordering more Iranian oil.
“Waivers are likely to be more extensive than the market expected,” energy consultancy FGE said, estimating that waivers overall would allow 1.2 to 1.7 million bpd of exports.
What’s more, a flotilla of supertankers carrying around 9 million barrels of Iranian oil worth about $650 million is sitting outside China’s Dalian port.
Most ships arrived in the last 30 days, shipping data showed, as Iran tried to get as much crude as possible into markets before the sanctions took effect.
“With the waivers, prices can be managed in the $70-$80 per barrel range, with the upside at around $85 per barrel and the downside limited to $65 per barrel,” FGE said.
Beyond Iran, US bank Morgan Stanley said “supply continues to come in higher-than-expected, particularly from the US, Middle East OPEC, Russia and Libya.”
Output from the world’s top-three producers Russia, the United States and Saudi Arabia, broke through 33 million bpd for the first time in October. These three countries now meet more than a third of global consumption.
Iraq, second-largest producer in the Organization of the Petroleum Exporting Countries (OPEC), plans to raise output to 5 million bpd in 2019, from 4.6 million bpd currently.
Eyeing the wave of new supply, Morgan Stanley lowered its year-end and first-half 2019 Brent price forecast from $85 per barrel to $77.50.
Inventories are also swelling.
US crude stocks climbed by 7.8 million barrels in the week ending Nov. 2 to 432 million, data from the American Petroleum Institute showed on Tuesday.
J.P. Morgan said “global floating storage has increased by 3.6 million barrels since July ‘18 to 33.9 million barrels.”
Despite the well-supplied market, J.P. Morgan still warned “the risk to supply remains very high” due to geopolitical risk and a “lack of spare capacity.”
Part of this risk comes from Venezuela, where crude production is in “free-fall” and could soon drop below 1 million bpd, the International Energy Agency’s Executive Director Fatih Birol said on Tuesday, down from the more than 2 million bpd it averaged last year.


Samsung delays Galaxy Fold media events in China

Updated 22 April 2019
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Samsung delays Galaxy Fold media events in China

  • Instead of plaudits ahead of the phone’s launch on April 26 in the US, Samsung has instead received brickbats
  • The hashtag #foldgate trended on Twitter because of the smartphone issues

SEOUL: Smartphone maker Samsung postponed media events for its Galaxy Fold planned for this week in Hong Kong and Shanghai, a company official said, days after reviewers of the foldable handset reported defective samples.
The official did not elaborate on reasons or rescheduling.
Instead of plaudits ahead of the phone’s launch on April 26 in the United States, the South Korean conglomerate has been blighted by technology journalists reporting breaks, bulges and blinking screens after using their samples for as little as a day.
Samsung said it received “a few” reports of damage to the displays of samples of the $1,980 handset, raising the specter of the combustible Galaxy Note 7 three years ago which the firm ultimately pulled from shelves at massive cost.
The reviewers’ reports of broken screens went viral online and prompted the creation of hashtag #foldgate on Twitter.
Samsung has hailed the folding design as the future in a field that has seen few surprises since Apple’s iPhone in 2007. Chinese rival Huawei Technologies has also announced a folding handset, the Mate X.
The Samsung official on Monday said it had no change to its previously announced release date in the United States.
It plans to begin South Korean and European sales in May, and Chinese sales from an undisclosed date.