Oil set for weekly fall on possible return of Iranian supply (With Trading Strategy)
Oil slips with potential sanctions relief on Iran looming and the oil may fall further.

Oil prices nudged up on Friday, recovering from three days of losses as investors braced for the return of Iranian crude supplies after officials said Iran and world powers made progress on talks to revive a 2015 nuclear deal.
Brent crude oil rose 0.01% to $64.96 a barrel, while U.S. West Texas Intermediate rose 0.12% to $61.90 a barrel by 15:50(GMT+8) .
For the week, however, both contracts are down nearly 5% and on track to post their biggest weekly loss since March after Iran's president said the United States was ready to lift sanctions on his country's oil, banking and shipping sectors.
Iran and world powers have been in talks since April on reviving the deal and the European Union official leading the discussions said on Wednesday he was confident a deal would be reached.
"Significant progress appears to have been made in the ongoing nuclear negotiations in Vienna and around 1 million barrels per day of additional Iranian barrels looks set to potentially hit the market in the back half of this year," RBC Capital Markets' Helima Croft wrote in a note.
“Crude and product prices continue to price in some additional downside risk as the U.S. and Iran make progress towards a deal” that could see the U.S. rejoin the Joint Comprehensive Plan of Action nuclear deal and end sanctions against Iranian oil exports, said Robbie Fraser, global research and analytics manager at Schneider Electric, in a note.
“While obstacles remain, Iranian President Hassan Rouhani offered optimistic comments on state media amid ongoing talks between U.S. and Iranian delegations,” he said.
Iranian President Hassan Rouhani said in a televised speech that sanctions on oil, shipping, petrochemicals, insurance and the central bank had been dealt with in the talks.
"That really weighed on sentiment and that pushed us down a little bit," said Phil Flynn, senior analyst at Price Futures Group in Chicago. "There’s room in the global market for more Iranian oil but in the short term that’s what is weighing on us today.”
But European diplomats said success was not guaranteed and very difficult issues remained, while a senior Iranian official contradicted the president.
The bank expects Iranian crude and condensate production to rise to 3.2 million bpd in December, from around 2.8 million bpd in the first quarter, and only reach full capacity of 4.2 million bpd in early 2023.
Indian refiners and at least one European refiner are re-evaluating their crude purchases to make room for Iranian oil in the second half of this year, anticipating that U.S. sanctions will be lifted, company officials and trading sources said. read more
"With global oil demand growth projected to be healthy for the balance of this year and in 2022, the (OPEC+) producer group is in a relatively comfortable position to deal with increasing Iranian output without undermining the oil rebalancing," PVM analysts said.
Concerns about the demand outlook in Asia also dragged prices down. Almost two-thirds of people tested in India show exposure to the coronavirus.
Still, investors remain upbeat about fuel demand recovery this summer as vaccination programmes in Europe and the United States would allow more people to travel, although rising cases across parts of Asia could weigh on that region's consumption.
Option bets on oil prices rising above $100 for the December 2021 Brent contract have jumped after last week's surprisingly strong U.S. inflation data, with open interest on calls nearly tripling in May, JPMorgan analysts said. The bank's forecast is for Brent to end 2021 at $74.
To reach $100, demand would need to average above 102.6 million bpd in the third quarter and grow to 103.6 million bpd in the fourth quarter, JPMorgan said, in the absence of any additional OPEC+ supply response.
Sultan Ahmed Al Jaber, chief executive of the Abu Dhabi National Oil Co, said on Thursday that oil demand has risen to 95 million bpd.
"A more aggressive ramp up in Iranian production and exports than expected would be yet another limiting factor on fundamentals pulling prices up towards $100/bbl alone," JPMorgan said.
Trading Strategy (source: Trading Central)
Pivot: 63.15
Our preference: short positions below 63.15 with targets at 61.15 & 60.10 in extension.
Alternative scenario: above 63.15 look for further upside with 63.95 & 64.55 as targets.
Comment: as long as 63.15 is resistance, look for choppy price action with a bearish bias.
Supports and resistances:
64.55
63.95
63.15
62.17 Last
61.15
60.10
59.45
Pivot: 66.50
Our preference: short positions below 66.50 with targets at 64.20 & 63.20 in extension.
Alternative scenario: above 66.50 look for further upside with 67.15 & 67.80 as targets.
Comment: the RSI calls for a new downleg.
Supports and resistances:
67.80 ***
67.15 **
66.50 ***
65.19 Last
64.20 **
63.20 *
62.60 ***
Guideline for Trading Central strategy
Trend chart reading guideline
1. First look at the time period in the upper left corner of the chart: ·30MIN and 1H chart shows the trading suggestions for intraday ·Daily chart shows the market trend analysis in next 2-3 days
2. The blue horizontal line on the chart marks the pivot: pivot indicates the reversal of the market. When the price is above the pivot, it indicates an upward trend, when the price is below the pivot , it indicates a downward trend. When the price breaks through the pivot, the trend is reversed.
3. The red and blue thin curves in the Candlestick chart chart are technical indicators: Red line is MA20+Bollinger bands, Blue line is MA50. under the Candlestick chart chart are also the technical indicators: Blue line is RSI, Red line is 9MA;
4. The green horizontal line is the resistance level for a price increase, and is also the profit target for long orders; the red horizontal line is the support level for a price decrease, and is also the profit target for short orders.
How to use TC strategy?
1.[Pivot] is the reversal line of the market trend. When the price up the pivot line which means in Bullish, you can open a long position or Buy. on the contrary, when the price under pivot line which means in bearish. You ‘d better make short positions or Sell.
2. [our preference] is the main trading suggestion for your reference. You can exit your trading refer to this target or close positions before it.
3. [Alternative scenario] is the plan B for your reference.
4. [Comment] is the technical analysis of market trends and technical support for trading strategies.
5. [Supports and resistance] Supports are levels where the price tend to find support as it falls.
Resistances are levels where the price tend to find resistance as it rises. So, exit before the trend reverse.
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