Last Friday, oil prices fell sharply as the number of US rigs suddenly rebounded. WTI fell 1.6% to close at $55.48. The number of oil rigs increased by 11 for the first time while operating costs are reducing and the efficiency is improving.
On Monday, oil fell again with a gap after the Greek people decided to vote against austerity policies, putting pressure on the euro and the dollar pushed up.
Currently WTI is trading at $54.67 at 3:24 pm GMT + 7, down 0.2% compared with the opening price.
Tomorrow (7/7) is the interim deadline extended for Iran and the P5 + 1 to reach an agreement on lifting the embargo on Iran. Iranian officials are very optimistic on the results of negotiations and have linked up with the traditional oil partners in EU, such as Vitol Group, Royal Dutch Shell PLC, Total SA and Eni SpA.
Iranian Deputy Oil Minister, Mr. Mansour Moazami said: “We were ready to take off.”
Mr. Moazami said that global economic growth will boost demand and said that Iran is heading to customers in both EU and Asia. The maximum capacity that Iran can achieve is about 4.2 million barrels per day. Although many experts believe Iran could not achieve that target in the short term, Moazami’s confident statement also will create certain effects, pushing the oil price go down.
In the group meeting earlier in June, Iran has called for OPEC “paveway” for Iran to return to the market and suggested reallocating quotas. Saudi Arabia has immediately rejected this proposal due to regulations on allocation of the quota had caused conflicts among members. Anyway Iran has vowed to boost exports as soon as the sanction is lifted, if OPEC can not ease disagreement among themselves, it only exacerbates global oversupply.
Forecast: after breaking Fibo 38.2 at the price $55.55, oil could fall further down to $53.35.