Crude prices down after Iran waivers, EIA report on higher U.S. output

Nov. 8 (UPI) -- Crude oil prices were lower Thursday morning as bearishness was fueled this week by U.S. waivers to allow some countries to continue to buy Iranian oil, as well as an EIA report projecting higher-than-expected U.S. output increases, an analyst said.

As of 10:04 am EST, WTI front-month was down 0.8 percent to $61.18 per barrel while Brent front-month was down 0.6 percent to $71.63 per barrel at the same time.

"Oil prices are still trying to find a floor here, as the combination of Iranian waivers and ongoing bearish-tilted weekly EIA reports continue to weigh heavy on pricing," Matt Smith, director of commodity research at ClipperData, told UPI.

However, there is an expectation that if Brent continues to decline, there will be an incentive for OPEC and non-OPEC producers to discuss crude output productions. There will be a Joint Ministerial Monitoring Committee of crude producing nations this weekend in Abu Dhabi where an agreement could be reached.

"One factor which may support prices and halt the bloodletting over the next two trading days is the JMMC meeting for OPEC/non-OPEC in Abu Dhabi this weekend," Smith said.

"With prices falling so far so fast, timing appears ripe for key OPEC players to ratchet up rhetoric once more: They are likely to talk up production cuts as Brent gets close to $70 -- the seeming bottom end of their tolerance range," he added.

Crude oil prices have steadily declined since reaching a peak in early October, when Brent oil futures traded at over $85 per barrel amid concerns about potential supply reductions following the reintroduction of U.S. nuclear-related sanctions aimed at preventing Iran from continuing oil exports. The sanctions went back into effect on Nov. 5.

However, Saudi Arabia in early October announced plans to increase production to cover from any potential supply disruption related to U.S.-nuclear sanctions against Iran, adding that other OPEC and non-OPEC governments like Russia would make efforts to maintain the market balance.

Selloffs since that date have resulted in large losses in crude oil prices. In addition, the United States on Monday announced waivers for several nations -- including big consumers China, India and South Korea -- so that they could continue to temporarily buy Iranian crude oil, extending market losses into this month. The EIA announced on Wednesday U.S. crude oil production increases that exceeded expectations.