Investing.com - WTI crude oil prices reversed gains to settle lower Tuesday, shrugging off signs of waning demand for Iran crude as U.S. sanctions loom.
On the New York Mercantile Exchange crude futures for September delivery fell 16 cents settle at $67.04 a barrel, while on London's Intercontinental Exchange, Brent fell 0.34% to trade at $72.35 barrel.
India, the second-biggest crude customer for Iran, is reportedly considering slashing its imports of Iranian crude by half to secure a waiver from the U.S. to continue with imports, Bloomberg reported, citing people familiar with the matter.
After pulling the United States out of the Iran nuclear agreement in May, President Donald Trump paved the way for sanctions against Iran to snap back into place.
U.S. sanctions, slated for early November, are expected to cripple Iran's energy infrastructure and oil exports as they seek to cut Iran crude imports to zero. The first wave of sanctions came into effect last month, curbing Iran's purchases of U.S. dollars, its trade in gold and other precious metals and its buying of coal and industrial-related software.
In a further sign that the United States' tough stance on sanctions against Iran was starting to bite, South Korea imports of Iranian crude fell by 43.5% to 788,651 tonnes in July, compared to a year earlier, preliminary data from Korea Customs Service showed.
China is Iran's biggest crude customer, importing more than quarter of its crude from the Islamic Republic, following by India at about 22%, while South Korea imports about 11%.
Expectations for a steeper losses of Iranian crude have mostly limited downside momentum in oil prices at a time when major oil producers have pledged to ramp up output.
OPEC, in its monthly report Monday, said its member production for July (from secondary sources) rose 41,000 bpd to 32.32 million bpd, led by increases in Nigeria, Kuwait, Iraq and UAE. This was partially offset, however, by decreases in Saudi Arabia, Iran, Libya and Venezuela.
The rise in OPEC production comes just a few months after the oil cartel agreed to ease curbs on output restrictions, which had been put in place by the production-cut pact in November 2016 to rid excess crude supplies from the market.
OPEC agreed in June to raise output at a nominal increase of 1 million barrels a day (bpd) in an effort to stabilize oil prices and ease the threat of a global supply deficit amid expectations for a drop in Iranian exports.
The fall in oil prices comes ahead of data due Wednesday expected to show U.S. crude supplies, already close to 3-year lows, fell by about 2.499 million barrels last week.
The American Petroleum Institute, an industry group, releases its report at 4:30 p.m. ET, followed by the Energy Information Administration's report Wednesday at 10:30 a.m. ET.