Oil rises to $73 on report of Russia, Saudi output cut talks

A Chinese vessel approaching beleaguered Iranian tanker Sanchi to help extinguish a fire that started after it collided with a Chinese vessel off China's shores

However, the White House has granted waivers to eight countries to keep importing Iranian oil at reduced rates, reversing the previous strategy of targeting zero exports.

Trump denounced the deal, which lifted sanctions on Iran in return for limits on its nuclear program. These are also Iran's biggest buyers, meaning Iran will be allowed to still export some oil for now.

A Saudi think tank is studying what happens to oil markets in a world without OPEC.

Portfolio managers have been net sellers of 371 million barrels since the end of September, taking their net long position to the lowest level for 15 months, according to records published by regulators and exchanges.

One of the sources said the United States had attached some strings to the import allowance, including counter-party disclosures and laying open settlement methods, which were being evaluated before placing new orders with Iran.

Analysts said those countries may be more willing to cut output now that the U.S. midterm elections are over. Oil peaked in October on concerns that U.S. sanctions on Iran that came into force this week would deprive the oil market of substantial volumes of crude, draining inventories and bringing shortages in some regions. The other two signatories - Russian Federation and China - are firmly opposed to the sanctions.

The mixed outcome of the U.S. congressional mid-term elections saw stockmarket jump, but oil prices fell to their lowest levels since March as the tightening of Trump administration sanctions on Iran from Monday continued to splutter.

Officials from both banks said, however, that won-denominated payments for Iranian oil were still being reviewed, and that no schedule a for resumption was set yet.

But they may not be happy if crude prices continue to weaken.

Separately, a top OPEC official from Iran, which has been angered by higher production in Saudi Arabia and Russian Federation in response to Trump's calls, said Riyadh and Moscow needed to cut output by 1 million barrels per day. If the sanctions are meant to "convince the [Iranian] regime to abandon its current revolutionary course", as Pompeo said on Monday, such exceptions surely undercut that effort.

WTI Crude prices could drop into the $40s, with the USA oil benchmark in a "ferocious" bear market, analyst and CNBC host Jim Cramer said on Thursday. We have so many countries that are on our side.

The sanctions, however, will inevitably erode Iran's state finances and raise already high inflation and jobless rates, making life harder for ordinary Iranians.

Mr Trump was keen to talk up his administration's capability of completely isolating Iran. Still, Iran demonstrated considerable resilience and ingenuity in coping with earlier global sanctions, and there is little to suggest Tehran could not do this again.

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