Peak crude oil is back--at least for now! U.S. oil futures soared after the Energy Information Administration (EIA) acknowledged that U.S. oil output will fall despite earlier predictions to the contrary, only to fall back after the American Petroleum Institute reported a 12.2 million barrel increase in crude supply.
Ultra bears are throwing in the towel as a bottom in crude oil is starting to develop. Oil prices soared after a dismal jobs report and signs that demand in Asia is improving, and the hopes of a quick return of Iranian oil to the market is off the table. Hedge fund and speculators are now embracing the long side as the prediction of and the resumption of the epic crude price collapse is now not very likely.
Maybe rig count cuts matter after all? Market bottoms are usually formed after a price drop cuts into production and investment at a time when low price creates more demand. That looks like the current scenario in crude oil.
Iran nuclear talks go into overtime and if they get a deal done today it will be forever known as the "April Fools' agreement." This may or may not be my commentary of what I think is the wisdom of a deal or those whom negotiated the deal, where the United States seems desperate to get a deal--any kind of a deal.
Brent crude oil dropped towards $55 a barrel on Tuesday as Iran and six world powers entered a final day of talks over a nuclear deal that could see the energy-rich country increase oil exports to world markets.
Iran talks go into overtime causing some traders to believe that they may actually get some type of a deal done. The crude oil market today will be torn between focusing on the renewed strength in the dollar versus Iran nuclear talks that at least in the short term like they are going into overtime.
Iran talks continue giving bear crude oil traders an edge as a lifting of sanctions is perceived as adding to a global oil glut. Even as reports surface that Iran is now saying that they will not ship atomic fuel out of their country--which is a key part of the overall agreement--the talks continue ahead of the so called Tuesday deadline.