Oil Rallies Amid Iran News

June 22, 2021 at 08:49 PM

It seems like the oil is in a very good position on the market these days, since its price keeps on rising. This Monday it shown a nearly 3% gain. Following Iran’s presidential election, which was won by the ultraconservative judiciary chief Ebrahim Raisi, Iranian negotiators in Vienna, confirmed that they plan to continue pressing towards a deal.

“We have reached a clear text on all the issues, and what remains requires the decision of all parties. Therefore, it’s not unlikely that the next round of talks will be the last,” the foreign ministry optimistically stated.

In case of a successful nuclear deal, it would most likely lead to at least 2.5 million barrels of Iranian crude per day flooding back into the market. This would most likely result in oil price falling to increased supply, but traders have been buying any dip in oil so far. 

The Brent benchmark rose above 75 USD first time since October 2018 and at the same time, oil keeps on surging. The predictions of the Citigroup state that Brent will touch 85 USD before Q4 2021. But the Bank of America thinks it will go even higher, and its analyst Francisco Blanc reckons the commodity will reach triple digits or 100+ USD in 2022 as travel demand rebounds. 

From a technical point of view, Brent is now facing a stronger resistance of 75 USD, and if bulls push the price above that level, a further rally toward 80 USD could occur. On the downside, as long as oil remains above 70 USD, the medium and long-term outlooks seem bullish, with the short-term support probably located near 72 USD.

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