- A new Iran deal is less likely than it was last week.
- UN nuclear watchdog is extending a recently expired monitoring agreement by a month.
The price of oil as measured by West Texas Intermediate spot is higher by over 3.26% at the time of writing, up from a low of $63.65 and reaching a high of $66.11.
The price has rallied and has been fueled by COVID-19 vaccinations and the prospects of a demand drive like no other that can easily absorb any Iranian oil that would come on the market if Western talks with Tehran lead to the lifting of sanctions.
President Rouhani had announced last week that major sanctions will be lifted which would be expected to create fears of the additional supply that would ultimately be weighing on spot prices in energy markets.
However, there are now expectations that a new deal is less likely than it was last week as there are signs that Iranians and western powers cannot get the details worked out.
Iran and the UN nuclear watchdog are extending a recently expired monitoring agreement by a month, both sides said on Monday, avoiding a collapse of talks on reviving the 2015 Iran nuclear deal.
In any case, analysts at TD Securities explained that ''time spreads have remained well-behaved, in line with our expectations that the global market will ultimately be able to absorb the additional barrels.''
''After all, a massive amount of pent-up demand for mobility should offset the supply increases this summer, suggesting that a gradual return to market could even lead to a short window of time in which crude prices could break north of $70/bbl if demand surprises to the upside, while OPEC+ sticks to their cautious agreement,'' the analysts added.
''Ultimately, however, the massive scale of OPEC's spare capacity will make a break north of $70/bbl not sustainable.''
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD bounces back, trades above 1.0860
EUR/USD bounced from a fresh weekly low of 1.0827, as the US Dollar lost steam following a weak ISM Manufacturing PMI report and words from Federal Reserve Chair Jerome Powell. Powell reiterated its hawkish message, dismissing potential rate cuts in the near future.
GBP/USD turns north ahead of the weekly close
GBP/USD recovered above 1.2650 in the American session on Friday. The US Dollar lost its temporal momentum and ends the weekly with a soft note amid soft local data. Hawkish comments from BoE officials underpinned the Pound this week.
Gold under mild pressure and below $2,040
Gold price (XAU/USD) slips below $2,040, giving up some of its intraday gains, but retaining most of its weekly gains. Caution ahead of first-tier events maintains investors away from the bright metal.
Bitcoin less than 21,000 blocks away from fourth halving, financial advisors await Spot ETF approval
Bitcoin is inching closer to the anticipated fourth halving event, scheduled for April 17, 2024, tentatively. BTC price is likely to rally to its $40,000 target; analysts consider this level a “magnet” for Bitcoin.
Weekly focus: Disinflation continues
This week, inflation came in below expectations in the euro area and the US. In the euro area, headline inflation fell much more than expected to 2.4% y/y (consensus: 2.7% y/y) in November from 2.9% in October.