U.S. markets closed
  • S&P 500

    3,825.33
    +39.95 (+1.06%)
     
  • Dow 30

    31,097.26
    +321.86 (+1.05%)
     
  • Nasdaq

    11,127.84
    +99.14 (+0.90%)
     
  • Russell 2000

    1,727.76
    +19.77 (+1.16%)
     
  • Crude Oil

    110.66
    +2.23 (+2.06%)
     
  • Gold

    1,808.30
    +6.80 (+0.38%)
     
  • Silver

    19.93
    +0.27 (+1.36%)
     
  • EUR/USD

    1.0424
    -0.0002 (-0.02%)
     
  • 10-Yr Bond

    2.8890
    0.0000 (0.00%)
     
  • GBP/USD

    1.2104
    +0.0001 (+0.01%)
     
  • USD/JPY

    135.5930
    +0.4180 (+0.31%)
     
  • BTC-USD

    19,877.65
    +573.69 (+2.97%)
     
  • CMC Crypto 200

    429.24
    +9.10 (+2.17%)
     
  • FTSE 100

    7,232.65
    +64.00 (+0.89%)
     
  • Nikkei 225

    26,153.81
    +218.19 (+0.84%)
     

Oil Price Fundamental Daily Forecast – Rally Resumes as Bullish Traders Shrug-Off Iran Supply Concerns

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·3 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading sharply higher at the mid-session on Monday, helped by renewed demand optimism and a dampening of concerns over fresh supply from Iran. Prices were also boosted on speculation that a new deal is less likely than it was last week.

At 16:15 GMT, July WTI crude oil is trading $65.47, up $1.89 or +2.97% and Brent crude oil is at $68.13, up $1.69 or +2.54%.

Oil prices are being supported on Monday as a demand bump fueled by COVID-19 vaccination drives gave traders optimism that the market can absorb any Iranian oil that would come on the market if Western talks with Tehran lead to the lifting of sanctions.

Iran and IAEA Extend Monitoring Deal, Averting Crisis in Nuclear Talks

Iran and the U.N. nuclear watchdog are extending a recently expired monitoring agreement by a month, both sides said on Monday, avoiding a collapse that could have pitched wider talks on reviving the 2015 Iran nuclear deal into crisis.

The move give breathing space to indirect negotiations between the United States and Iran that resume in Vienna this week. European diplomats had warned that failure to extend the monitoring pact would endanger those talks, which aim to bring the two countries back into full compliance with the 2015 pact.

The reprieve will only be brief, however, since the extension will expire soon after Iran’s June 18 presidential election, which is likely to bring in new interlocutors for the International Atomic Energy Agency and major powers.

“The equipment and the verification and monitoring activities that we agreed (on) will continue as they are now for one month, expiring then on June 24,” IAEA Director General Rafael Grosse told a news conference.

He spoke soon after Iran’s ambassador to the agency, Kazembe Gharibabadi, who urged major powers meeting in Vienna to make use of the window afforded by the extension.

“I recommend that they use this opportunity, which has been provided in good faith by Iran, and lift all the sanctions in a practical and verifiable manner,” Gharibabadi said on Monday, according to state media.

Short-Term Outlook

Oil prices fell last week after Iran’s president, Hassan Rouhani, said the United States was ready to lift sanctions on his country’s oil, banking and shipping sectors.

“Iran’s oil production has been rising in recent months, likely in anticipation of a lifting of the sanctions,” ANZ analysts said in a note on Monday.

Last week, we said the concerns over the new oil from Iran would be a short-term event and that the news was designed to chase out the weaker longs. We believe that prices are going to move higher over the longer-term as the global vaccination rates increase and demand rises. However, professional traders are in the market to make money and they’ll make more if they can buy oil at value. They aren’t likely to chase prices higher so we think traders are going to have to get used to the “buy the dip” strategy.

Although sell-offs look ugly at times, bullish traders have to remember that OPEC+ has their backs and aren’t going to let prices collapse like they did last year. Their job is to stabilize prices so even if more oil flows from Iran, OPEC+ will make the necessary adjustments to output to prevent the news from becoming a bearish event.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

More From FXEMPIRE: