Oil Drops on Iran and USD Strength

Oil prices fell on Monday as officials from Iran and six world powers discussed a possible deal over Tehran’s nuclear programme that could bring an end to sanctions and allow an increase in Iranian oil exports.

The two sides have until the end of Tuesday to come up with an agreement at talks in Lausanne, Switzerland.

Officials close to the talks have said progress has been made and many investors believe a deal is in the making. Few expect the talks to end without some sort of agreement.

 
“Regarding Iran, there are two possible outcomes: a framework deal or an extended deadline,” Bjarne Schieldrop, chief commodities analyst at SEB Markets in Oslo, told the Reuters Global Oil Forum.

Brent crude was down 40 cents at $56.01 a barrel by 0938 GMT as the market began to price in a deal with Iran. U.S. crude was down 80 cents at $48.07.

Oil markets are well supplied and recent figures show global production outstripping demand by around 1.5 million barrels per day (bpd), filling oil inventories.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza