Oil prices fell on Monday as the start to US sanctions against Iran's fuel exports was softened by waivers that will allow some countries to still import Iranian crude, at least temporarily.
Front-month Brent crude futures were at $72.39 per barrel at 1.42am GMT on Monday, down 44 cents, or 0.6 per cent from their last close.
US West Texas Intermediate crude futures were down 53 cents, or 0.8 per cent, at $62.61 a barrel.
Brent has lost more than 16 per cent in value since early October, while WTI has declined by more than 18 per cent since then.
This came as traders cut their bullish wagers on crude futures to a one-year low by the end of October, the fifth consecutive cut during a month when prices posted their largest drop since July 2016, data showed on Friday.
Prices have come under pressure since it became clear that Washington was allowing several countries to continue importing crude from Iran despite the sanctions, which officially started on Monday.
The United States said on Friday it will temporarily allow eight importers to keep buying Iranian oil when it re-imposes sanctions, aimed at forcing Iran to curb its nuclear, missile and regional activities.
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Washington has so far not named the eight, referred to as "jurisdictions", a term that might include Taiwan which the US does not regard as a country.
China, India, South Korea, Turkey, Italy, the UAE and Japan have been the top importers of Iran's oil, while Taiwan occasionally buys Iranian crude, although it is no major buyer.
Oil markets have been preparing for the sanctions for months.
"Iranian exports and production had been declining steadily ... Iranian exports show a decline of more than 1 million barrels per day as of October from May," said Edward Bell of Emirates NBD bank.
On the demand side, Mr Bell warned that consumption may be slowing due to an economic slowdown, as seen in a sharp drop in refining profits.
"Sagging refining margins at a time of weak crude prices sends a very telling message to us that demand is underperforming," he said.
A slowdown in demand would come just as output is rising.
Joint output from the world's top producers - Russia, the US and Saudi Arabia - in October rose more than 33 million bpd for the first time, up 10 million bpd since 2010.
These three countries alone meet more than a third of consumption.
In the Middle East, Abu Dhabi National Oil Company plans to increase its oil production capacity to 4 million bpd by the end of 2020 and 5 million bpd by 2030, Adnoc said on Sunday, compared with current output of just over 3 million bpd.