Iran Sanctions Optimism
Oil prices have come under heavy selling pressure on Thursday with the crude futures market down almost 5% from yesterday’s highs. The move comes in response to market chatter that Iran is prepared to strike a deal with the US in exchange for the lifting of sanctions. This follows Trump yesterday lifting sanctions against Syria during his state visit. The prospect of the lifting of Iranian sanctions has big implications for the oil market with the return of Iranian crude expected to pressure prices lower. With Saudi Arabia expressing support for fresh US/Iran nuclear talks, there is a growing expectation that a deal will be agreed. Any news flow on this matter is likely to amplify selling in crude.
EIA & OPEC+
Crude prices have also come under pressure from the latest EIA data released yesterday which showed an unexpected inventories surplus. US commercial crude stores rose to 3.5 million barrels last week, a sharp uptick from the prior (and expected) -2-million-barrel reading. The data reflects weaker demand in the US and comes at a time when OPEC+ has been ramping up crude output, adding to bearish market pressure. While this dynamic continues, oil prices look likely to struggle to establish a higher price base with the market vulnerable to a fresh push lower if OPEC+ hikes oil output again this month.
Technical Views
Crude
The rally in crude has stalled for now into a test of the 63.83 level with price since turning lower again. Focus now is on whether the market holds above the 57.42 level and the bear channel support. If broken, 53.97 will then come into view as deeper support to watch.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.