Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Stock Market Election Year Cycles – What to Expect? - 4th Jun 20
Why Solar Stocks Are Rallying Against All Odds - 4th Jun 20
East Asia Will Be a Post-Pandemic Success - 4th Jun 20
Comparing Bitcoin to Other Market Sectors – Risk vs. Value - 4th Jun 20
Covid, Debt and Precious Metals - 3rd Jun 20
Gold-Silver Ratio And Correlation - 3rd Jun 20
The Corona Riots Begin, US Covid-19 Catastrophe Trend Analysis - 3rd Jun 20 -
Stock Market Short-term Top? - 3rd Jun 20
Deflation: Why the "Japanification" of the U.S. Looms Large - 3rd Jun 20
US Stock Market Sets Up Technical Patterns – Pay Attention - 3rd Jun 20
UK Corona Catastrophe Trend Analysis - 2nd Jun 20
US Real Estate Stats Show Big Wave Of Refinancing Is Coming - 2nd Jun 20
Let’s Make Sure This Crisis Doesn’t Go to Waste - 2nd Jun 20
Silver and Gold: Balancing More Than 100 Years Of Debt Abuse - 2nd Jun 20
The importance of effective website design in a business marketing strategy - 2nd Jun 20
AI Mega-trend Tech Stocks Buying Levels Q2 2020 - 1st Jun 20
M2 Velocity Collapses – Could A Bottom In Capital Velocity Be Setting Up? - 1st Jun 20
The Inflation–Deflation Conundrum - 1st Jun 20
AMD 3900XT, 3800XT, 3600XT Refresh Means Zen 3 4000 AMD CPU's Delayed for 5nm Until 2021? - 1st Jun 20
Why Multi-Asset Brokers Like TRADE.com are the Future of Trading - 1st Jun 20
Will Fed‘s Cap On Interest Rates Trigger Gold’s Rally? - 30th May
Is Stock Market Setting Up for a Blow-Off Top? - 29th May 20
Strong Signs In The Mobile Gaming Market - 29th May 20
Last Clap for NHS and Carers, Sheffield UK - 29th May 20
The AI Mega-trend Stocks Investing - When to Sell? - 28th May 20
Trump vs. Biden: What’s at Stake for Precious Metals Investors? - 28th May 20
Stocks: What to Make of the Day-Trading Frenzy - 28th May 20
Why You’ll Never Get Another Stimulus Check - 28th May 20
Implications for Gold – 2007-9 Great Recession vs. 2020 Coronavirus Crisis - 28th May 20
Ray Dalio Suggests USA Is Entering A Period Of Economic Decline And New World Order - 28th May 20
Europe’s Coronavirus Pandemic Dilemma - 28th May 20
I Can't Pay My Payday Loans What Will Happen - 28th May 20
Predictive Modeling Suggests US Stock Markets 12% Over Valued - 27th May 20
Why Stocks Bear Market Rallies Are So Tricky - 27th May 20
Precious Metals Hit Resistance - 27th May 20
Crude Oil Cuts Get Another Saudi Boost as Oil Demand Begins to Show Signs of Life - 27th May 20
Where the Markets are heading after COVID-19? - 27th May 20

Market Oracle FREE Newsletter

Coronavirus-stocks-bear-market-2020-analysis

Iran Nuclear Negotiations, OPEC Meeting Loom For Oil Markets

Commodities / Crude Oil Nov 20, 2014 - 03:15 PM GMT

By: OilPrice_Com

Commodities

As November draws to a close, there are two major events that could profoundly change the oil markets.

With the clock ticking, the 5 permanent members of the UN Security Council plus Germany (P5 plus 1) are negotiating down to the wire with Iran over its nuclear program. The two sides have made substantial progress, but some difficult issues remain unresolved ahead of the November 24 deadline.


"We're very keen to try to get to a deal, but not a deal at any price," U.K. Foreign Secretary Philip Hammond said on November 17. "There will have to be very significant further movement by the Iranians if we're going to be able to get to a deal."

Both sides have approached negotiations with seriousness and with the intention to actually resolve their differences, according to officials involved in the process. Iran has signaled its willingness to accept international inspections of its nuclear program and the possibility of receiving enriched uranium from abroad. In exchange the U.S. has suggested Iran could maintain some domestic ability to enrich uranium.

Outstanding issues center on the pace at which the U.S. would lift sanctions as well as the exact details of Iran's enrichment capability. With only days left until a deadline, a deal is highly uncertain. Over at Quartz, Steve LeVine writes that the stakes are high, with either a diplomatic breakthrough or a major collapse in negotiations as the two most likely outcomes.

He says a deal is more likely than not due to the enormous financial pressure Iran is experiencing because of falling oil prices. With prices down more than 30 percent from just a few months ago, and Iran needing somewhere around $135 per barrel for its budget to breakeven, it would be the biggest beneficiary of a diplomatic accord with the west.

Not only that, but the Iranian government has also raised expectations of a deal. It has received foreign business delegations, highlighting the investment opportunities in Iran once sanctions are removed. There is potential for carmakers, mining companies, and financial institutions to expand into Iran if it opens up. BP and the French oil company Total recently said that they would be interested in going back into Iran if sanctions are lifted and the Iranian government offers favorable terms.

Earlier this year, Iranian President Hassan Rouhani promised that the sanctions regime would soon be lifted. "With your support, this government has taken the first steps towards the lifting of the brutal sanctions ... We will witness the sanctions shattering in the coming months," Rouhani told a crowd in April, according to Reuters. Talk of the pending economic benefits of a deal could make it difficult for Iran to back off.

And sanctions have taken their toll. Iran's oil exports have more than halved from their pre-sanctions level of about 2.5 million barrels per day. As a result, Iran's GDP fell by 5.8 percent in 2012, the year that tough western sanctions took effect.

Hardliners in both countries could work to prevent a deal. But in Iran, even among the most conservative, there may not be aggressive opposition to a deal in principle, reports The Economist.

While far from certain, a deal could see the return of several million barrels per day of Iranian oil production, although at a gradual pace.

While nuclear negotiations reach the finish line, a second event is set to take place - OPEC's meeting in Vienna on November 27 to decide its oil production target. There has been much speculation, but little hint at what the cartel will do. There has been a flurry of diplomatic activity behind the scenes in the last few weeks as OPEC members plead their case with Saudi Arabia to cut back production. Libya's Prime Minister visited Riyadh on November 13, arriving just as Iraq's President departed.

Saudi Arabia has thus far showed no willingness to cut production, with officials earlier this month suggesting they would only act if oil prices dropped to around $70 per barrel. At the time, OPEC officials thought that was unlikely, but with Brent crude dropping below $80 on November 17 on news that Japan fell into recession, pressure is mounting on Riyadh to act.

There is a high degree of uncertainty over how the Iranian negotiations and the OPEC meeting will play out, but the end of November will be hugely important for energy markets.

Source: http://oilprice.com/Energy/Crude-Oil/Iran-Negotiations-OPEC-Meeting-Loom-For-Oil-Markets.html

By Nick Cunningham of Oilprice.com

© 2014 Copyright OilPrice.com- All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules