WTI crude dropped from an intra day high of just over $50 to $48.40 as of 2 p.m. after the announcement of a political framework for a nuclear deal with Iran. Asia Unhedged has been arguing that the risks to oil are on the downside, and we’re sticking to our story.
Iran might add another 1.5 million barrels a day to world oil supply if the deal is signed and sanctions are lifted. It also has vast amounts of oil stored in tankers that might come onto the market quickly. Worst of all for the oil price, Saudi Arabia may try to push prices down further in order to crimp the finances of its main geopolitical rival.
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