Oil Slides as Treasury Backs Off on Iranian Sanctions
This article was originally published on ETFTrends.com.
Oil prices continued their unceremonious slide, falling to $68.32 as of 3:30 p.m. Eastern Time after Treasury Secretary Steve Mnuchin said crude importers might receive waivers to continue buying supplies from Iran, lightly tapping the brakes on earlier sanctions to reduce purchases from Iran to zero.
"We want people to reduce oil purchases to zero, but in certain cases if people can't do that overnight, we'll consider exceptions," said Mnuchin.
Related: Oil & Gas Exploration ETF Rebounds, Up 16% YTD
The sudden change of heart stems from Mnuchin saying that the Trump administration wants to avoid the disruption of global oil markets. In the meantime, the U.S. plans to keep the pressure on Iran to make concessions regarding its nuclear program and missile tests, among other things.
After surpassing the $75 price mark--a 3.5-year high, WTI crude has fallen by about 9% the past week.
Oil Traders Cautious
In addition to the easing of Iranian sanctions, oil traders are cautious due to a potential slowdown in the global economy. On Monday, the International Monetary Fund said that growth is slowing in the euro area, Japan and the United Kingdom.
Related: Trump May Tap Into Emergency Oil Supply
Furthermore, trade wars could put the global economy into deeper risk territory.
“Oil’s sell-off is a continuation of the downward move that began earlier this month when the market realized that the supply of crude is set to rise,” said Fawad Razaqzada, a technical analyst at Forex.com.
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