WTI futures on NYMEX fell 1.2% to about $75.50 in Asian trade on Monday, reversing earlier gains after the United States and Iran reported progress in Switzerland towards a deal within 60 days. Iran\u2019s Foreign Minister Abbas Araghchi cited waivers for oil and petrochemical exports, the lifting of a US naval blockade on Iranian seaports, the release of some frozen assets and the start of a reconstruction and development plan, according to CNBC. Separately, Iran said it had re-closed the Strait of Hormuz over the weekend, while its foreign ministry later said a formal transit mechanism had been arranged to ensure safe passage for commercial vessels through the waterway.<\/p>\n
US Vice President JD Vance also said talks had made \u201cgreat progress\u201d, and mediators Qatar and Pakistan referred to progress as well. A Pak\u2013Qatar joint statement said a High Level Committee had agreed a roadmap towards a final deal within 60 days, enabling the immediate start of further technical talks. On the charts, WTI remains below the 20-day EMA at roughly $84.05, while the RSI (14) sits near 33. Resistance is seen at $84.05 and then $90, with support at the June 18 low of $72.79 and a potential move towards $67.20 if that level breaks.<\/p>\n
We see the significant progress in US-Iran talks as the main driver for lower oil prices. The potential for a final deal within 60 days introduces a fundamentally bearish outlook. This geopolitical shift is likely to dictate market direction for the next several weeks.<\/p>\n
A finalized agreement could reintroduce up to 1.3 million barrels per day of Iranian crude to the global market within months. This potential surge in supply comes at a time when recent data shows global inventories are already stable. We believe the market is not prepared to easily absorb this much additional volume without a significant price drop.<\/p>\n
This supply-side pressure is compounded by signs of weakening demand. The latest Short-Term Energy Outlook from the EIA last week revised global demand growth forecasts downward for the third quarter, citing a slowdown in Chinese industrial activity. This combination of rising supply and softening demand creates a powerful bearish catalyst.<\/p>\n
We can look to the period surrounding the 2015 JCPOA deal for a historical parallel. In the months leading up to and following that agreement, WTI crude prices fell by over 30% as the market priced in the return of Iranian oil. We anticipate a similar, though perhaps less severe, pattern to unfold this time.<\/p>\n
Given this outlook, we are positioning for further downside by purchasing put options. We are targeting strike prices below the recent low of $72.79, with an eye on the pre-war level around $67.20. These options provide a defined-risk way to capitalize on the expected price decline over the next 60 days.<\/p>\n
We are also establishing bearish call credit spreads with strike prices at or above the $84.05 resistance level. This strategy will be profitable if WTI remains below this technical ceiling, as we expect rallies to be short-lived. The low Relative Strength Index further supports the view that any upward movements will likely fail.<\/p>\n","protected":false},"excerpt":{"rendered":"
WTI slips to $75.50 as US-Iran talks progress, raising supply fears; technicals signal further downside risk.<\/p>\n","protected":false},"author":87,"featured_media":47840,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[71],"tags":[],"class_list":["post-49944","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\n\t\t