- 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 climbs to 10-day highs above 1.0700
EUR/USD gained traction and rose to its highest level in over a week above 1.0700 in the American session on Tuesday. The renewed US Dollar weakness following the disappointing PMI data helps the pair stretch higher.
GBP/USD extends recovery beyond 1.2400 on broad USD weakness
GBP/USD gathered bullish momentum and extended its daily rebound toward 1.2450 in the second half of the day. The US Dollar came under heavy selling pressure after weaker-than-forecast PMI data and fueled the pair's rally.
Gold rebounds to $2,320 as US yields turn south
Gold reversed its direction and rose to the $2,320 area, erasing a large portion of its daily losses in the process. The benchmark 10-year US Treasury bond yield stays in the red below 4.6% following the weak US PMI data and supports XAU/USD.
Here’s why Ondo price hit new ATH amid bearish market outlook Premium
Ondo price shows no signs of slowing down after setting up an all-time high (ATH) at $1.05 on March 31. This development is likely to be followed by a correction and ATH but not necessarily in that order.
Germany’s economic come back
Germany is the sick man of Europe no more. Thanks to its service sector, it now appears that it will exit recession, and the economic future could be bright. The PMI data for April surprised on the upside for Germany, led by the service sector.