The oil market experienced turbulence on Tuesday after Iran and global powers reached an historic deal that would remove sanctions in exchange for curbs on Tehran’s nuclear program.
Sanctions have long restricted Iran’s oil production and exports, and the country is eager to regain its status as a global energy power.
Crude prices initially fell by as much as 2.3% to $50.98 a barrel as investors reacted to the freshly-inked deal. However, oil bounced off those levels as investors weigh the details of the agreement and whether or not it will overcome deep skepticism in Congress. Oil was recently trading up 0.2% to $52.31.
Experts have warned that the deal could lead to a flood of new oil supply from Iran — the country has 30 million of barrels of crude in storage and ready for sale, according to FACTS Global Energy, an industry consultancy.
“Tehran has made clear its intention to lift exports as soon as the ink dries on an accord,” the International Energy Agency wrote in a July 10 report, before the deal was struck. “The bottom of the market may still be ahead.”
via CNN
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Alfonso Esparza
Latest posts by Alfonso Esparza (see all)
- Dollar Lower Ahead of Crucial Week for Brexit and Italian Budget - 11/16/2018
- UK PM Theresa May Says Cabinet Agreed to Brexit Deal - 11/14/2018
- Oil Keeps Falling on Oversupply Concerns - 11/13/2018