Crude oil prices
November WTI crude oil (DBO)(DWT)(USO) futures contracts rose 0.71% and were trading at $50.96 per barrel in electronic trading at 2:06 AM on October 13. Similarly, December 2017 E-Mini S&P 500 (SPY) futures contracts rose 0.02% to 2,550 in electronic trading at 2:06 AM on October 13.
WTI crude oil (UCO)(UWT) prices are near a one-week high. Moves in oil prices impact energy producers (RYE)(VDE) like EOG Resources (EOG), Devon Energy (DVN), Stone Energy (SGY), and Denbury Resources (DNR).
President Trump and Iran’s nuclear deal
Iran is OPEC’s third-largest crude oil producer, after Saudi Arabia and Iraq. President Trump considers the 2016 nuclear deal with Iran to be one of the worst deals. The nuclear deal is reviewed every three months. The next compliance deadline for this deal is on October 15. Trump plans to announce new terms and conditions for this deal on October 13.
Iran’s crude oil production
Reuters estimates that Iran’s crude oil production rose by 20,000 bpd (barrels per day) to 3, 810, 000 bpd in September 2017 compared with August 2017—the highest level in eight years.
Iran’s oil production has risen by 1,000,000 bpd since the United States lifted sanctions against January 2016. Any rise in oil production from Iran could have a negative impact on crude oil (BNO)(SCO)(OIL) prices.
Trump’s lack of support for the 2016 nuclear deal shouldn’t have an immediate impact on Iran’s crude oil production. However, it increases the uncertainty surrounding Iran’s oil production in the long term. Iran plans to increase its crude oil production to 4,500,000 bpd by 2022. Any rise in Iran’s oil supplies is bearish for crude oil prices.
Next, we’ll analyze how US crude oil inventories for the week ending October 6.