By Srinivas Chowdary Sunkara // petrobazaar // 9-5-2018.
Crude prices rocketed high in early trade
The day has come for the Bulls to call it as right that U.S is pulling out of Iran agreement which was priced in for last couple of days. Mr.Trump announced the scrapping of the deal which turned bullish for oil prices and went up above 2 % in Asian trade today. China announced the crude imports surge above 10Mbpd which Signaled the strong demand and China trade data shows that both imports and exports rose during the last month. Both the London and New york markets reacted to Trump's decision and seen flat price rally.
Crude oil price update
Both the futures advanced more than 2% after U.S president confirmed that U.S is coming out of Iran deal. Yesterday both the crude futures dropped by more than 1% on uncertainty and ambiguity over the deal. U.S crude futures, WTI for June delivery is trading at $70.59 a barrel with an increase of 2.215% on Nymex while Brent futures to be delivered in July spiked by 2.418% at $76.66 per barrel on London based ICE futures exchange in Asian trade at the time of reporting.
It seems that a spike in crude price is not fundamentally supportive. Unless EU comes out of the deal, I doubt the sustainability of the current crude price levels. Since EU tripled the bi-lateral trade with Iran since 2015, I suspect their stand on pulling of the deal. Coming to the supply side, U.S is already exporting the crude which can compensate the Iran's export shortages into global market. Investor should be cautious due to price sensitivity for next couple of days.
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