Brent Crude Down At $72.96 On Economic Slowdown Concerns

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The extra supply has caused a drop in crude prices, hurting income for other oil producers while helping Iran's foe Trump in the USA midterm elections, Kazempour said.

This has served to take the sting out of the sanctions threat, which helped to lift worldwide benchmark Brent crude futures to four-year highs of nearly $87 a barrel in early October.

The sanctions reimposed on Iran's oil exports - its main revenue source - and financial sector were triggered by US President Donald Trump's May 8 decision to abandon the 2015 worldwide deal created to block Tehran's development of nuclear weapons.

Turkey has said it is also evaluating possible imports after receiving a waiver, but President Tayyip Erdogan said on Tuesday the country would not abide by the sanctions as they were aimed at "unbalancing the world".

The EU is preparing a special mechanism to enable payments for Iranian oil and other exports without United States dollars, possibly through a barter system.

Also, the United States granted waivers on Iranian sanctions to eight countries who import that country's crude.

The API reported a draw in gasoline inventories for week ending November 2 in the amount of 1.2 million barrels. But the broadly united front of world powers that enforced sanctions on Iran previously, pushing Iran into nuclear restraint, has unraveled since Trump took office and clashed with allies over everything from trade to collective security.

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On Wednesday, Washington warned global shipping and insurance industries not to allow Iranian oil tankers into their territorial waters or ports, saying such access may run afoul the reimposed sanctions, in addition to increasing the possibility of catastrophic economic and environmental damage if any accidents occur.

But Iran supply is expected to rise after November as waivers are used to start ordering more Iranian oil.

Two sources familiar with the matter told Reuters that the country would be allowed to buy 360,000 bpd of Iranian crude during the exemption period, which would be about half the daily average China has been importing from Iran since January 2016. At first glance, this would seem improbable, given the way the government is trying to project the temporary waiver from sanctions given to India and seven other countries.

Venezuela's crude production was in "free-fall" and could soon drop below 1 million bpd, the International Energy Agency's Executive Director Fatih Birol warned on Tuesday, down from the more than 2 million bpd it averaged previous year.

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

India is, thus, being given time to phase out its oil imports from Iran in a calibrated fashion.

Distillate inventories were down this week by 3.64 million barrels, compared to a smaller expected draw of 2.775 million bpd.

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