Crude oil prices clambered upward on Monday afternoon as the market feared that Iran nuclear talks may be stalled after hardliner Ebrahim Raisi won the Iranian presidential election.
A weaker dollar lent further support to climbing oil prices.
Over the last thirty days, WTI has risen roughly $7.50 per barrel, from just over $66. Brent crude, on the other hand, has risen roughly $6.50 from the $68.30 a month ago.
The last time WTI spot prices were this high was back in October of 2018.
Bank of America’s newest pricing outlook suggests that Brent crude could hit $100 per barrel next year as pent-up oil demand is unleashed on a post-pandemic world.
But immediate pricing concerns eye Iran, and the impact a new president will have on any hopes of a nuclear deal with the United States, and subsequently, the additional crude oil that Iran could possibly export should the sanctions be lifted.
Market uncertainty typically weighs on oil prices, but the general sentiment in the market is that a new hardliner president may be unwilling to continue nuclear negotiations, therefore delaying or dashing hopes that sanctions will be lifted.
Market analysts have praised U.S. shale for thus far managing to keep from falling into the trap of increasing output as prices climb ever higher. But as WTI pushes closer to $75 per barrel, and if BofA’s $100 oil forecasts turn out to be a reality, U.S. oil drillers may find it far too tempting to maintain cost discipline for long.
By Julianne Geiger for Oilprice.com
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