• 5 hours Elon Musk Goes Full Conspiracy Theorist, Blames Big Oil for Tesla's Negative Media Coverage
  • 14 hours Holiday weekend: Gas Prices Surge
  • 5 hours Several US News Sites Block EU Readers After Missing GDPR Deadline
  • 20 hours How Much Oil Could EVs Feasibly Displace by 2040?
  • 25 mins How Lousy Shale Oil Economics Will Pull Down The U.S. Economy
  • 24 hours Why Alberta Will Win The War Over Trans Mountain
  • 1 day Democrats Urge Trump to ‘Stand Up to OPEC’ Amid Rising Oil Prices
  • 1 day Expected:Trump Cancels Summit With North Korea Scheduled For Next Month
  • 1 day High Oil Prices Becoming Herd Mentality
  • 23 hours $5 per gallon in Manhattan
  • 4 hours Psychological manipulation of oil prices.
  • 23 hours Trump announces more sanctions on Venezuela after Maduro Win
  • 2 days Water-Based Battery Claims Exceptional Scalability
  • 20 hours HAPPY RIG COUNT DAY!!
  • 1 day VW Just Ordered $48 Billion in Electric Car Batteries. That's About What Tesla Is Worth Right Now
  • 1 day Russia/Germany Pipeline Really A Security Threat for US?
Alt Text

EVs Could Erase 7 Million Bpd In Demand

Electric vehicle domination might still…

Alt Text

Iran Sanctions Threaten The Petrodollar

New U.S. sanctions on Iranian…

Jim Hyerczyk

Jim Hyerczyk

Fundamental and technical analyst with 30 years experience.

More Info

Trending Discussions

Is This Oil Rally Sustainable?

Trading Screen

July West Texas Intermediate crude oil is in a position to post its highest close since late 2014 on Friday. The rally is being driven by looming U.S. sanctions against major oil producer and OPEC-member Iran which threaten to drive prices even higher over the near-term as traders prepare for an even tighter supply situation.

This week’s speculative buying was initiated by President Trump’s decision on Tuesday to walk away from the Iran nuclear deal.

On the bullish side of the coin, the U.S. plans to re-impose sanctions against Iran, which produces around 4 percent of global oil supplies. The sanctions will be taking place at a time when OPEC-led production cuts have already tightened the supply situation. Additionally, global inventories have tightened amid strong demand from Asia.

Speculators are betting heavily that the sanctions will lead to supply disruptions that will make crude oil an attractive enough asset to drive prices to $80 -$100 per barrel later this year.

On the bearish side some traders believe prices won’t move nearly as high because of rising U.S. production and the possibility that other suppliers from within OPEC will step up output in order to counter the Iran disruption. This would essentially end the OPEC-led deal to trim production.

There is some chatter in the markets suggesting Kuwait and Iraq as two producers with the best ability to raise output quickly in response to any fall in Iranian exports.

Additionally,…

To read the full article

Please sign up and become a premium OilPrice.com member to gain access to read the full article.

RegisterLogin

Trending Discussions





Oilprice - The No. 1 Source for Oil & Energy News