Oil prices drop more than 5% to fresh one-year lows

Roughneck
Brian Waldner is covered in mud and oil while wrestling pipe on a
True Company oil drilling rig outside Watford, North
Dakota.

Reuters/Jim
Urquhart

Oil prices hit their lowest level
since 2017 on Tuesday, sliding further into a bear market amid
concerns about oversupply.

West Texas
Intermediate

fell 5.6%
to just below $54 per barrel, while the international
benchmark


Brent

shed 5% to
$63.68 a barrel.
The
resumed sell-off came amid a sharp fall in global equities, with
all three major US indices wiping out 2018 gains on
Tuesday.

Oil had been holding close to
multi-year highs in recent months following President Donald
Trump’s withdrawal from the Iran nuclear deal, a move that
reinstated sanctions against Tehran’s crude exports.

Iran’s oil shipments have fallen
by more than a third since the announcement, and analysts have
estimated more than a million barrels per day would roll off the
market by the the first quarter of 2019.

But prices have fallen by nearly
a quarter from recent peaks after the Trump administration
earlier this month granted temporary waivers to eight countries —
China, India Turkey, South Korea, Italy, Greece, Japan and
Taiwan.

The waivers are still stricter
than under the Obama administration, which made exceptions for 20
countries and asked for them to reduce Iranian crude imports by a
fifth every 180 days. The Trump administration, on the other
hand, has demanded at least two cut imports to zero “within
weeks” and that the others reduce at a faster rate than
before.

Early Tuesday, International
Energy Agency executive director Fatih Birol said that volatility
within the energy sector could be just beginning,

according to
Reuters

.

“We are entering an unprecedented
period of uncertainty in oil markets,” he said at a conference in
Norway. Earlier this year, the IEA warned Trump’s sanctions
against Iran could make maintaining global supply “very
challenging.”

OPEC is scheduled to discuss coordinated output levels at a
meeting next month.

Get the latest Oil WTI price here.