WTI could jump to $75 a barrel if President Trump reimposes sanctions on Iran on May 12. That’s the deadline for a sanction waiver that Trump has said he will not extend unless the United States’ partners in the Iran nuclear deal from Western Europe come up with a better deal.
Judging by price movements over the last week, it seems the market is leaning towards new sanctions and generally fails to recognize Trump’s penchant for bringing things to a fever pitch and then letting the air out. Despite a surprise build of 2.2 million barrels in U.S. crude oil inventories in the week to April 20, prices did not lose any of their earlier gains made on the back of rising tension between the U.S. and Iran. They also remained largely unresponsive towards yet another record-breaking week in production: the EIA said U.S. drillers produced 10.586 million barrels of oil daily last week.
However, if we are to believe French President Emmanuel Macron, Trump might get his new deal: his European partners are currently working on a revision of the original 2015 deal that seeks to address Trump’s concerns, Macron said.
Should Trump approve the revised deal, prices might fall as this would be the less expected outcome of the situation. By how much they would fall, however, remains unclear. If trump rejects the revised deal, WTI at $75 is a possibility, especially since Iran has indicated it will not leave such a blow unanswered. Tehran has not gone into…