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Oil Tumbles Almost $6 as Iran TV Says Nuclear Deal Revival Agreed

Published 08/30/2022, 12:45 PM
Updated 08/30/2022, 03:09 PM
© Reuters.

© Reuters.

By Barani Krishnan

Investing.com -- Oil closed down almost $6 a barrel on Tuesday, with global crude benchmark Brent falling beneath key $100 pricing, after a pro-Tehran television station out of London reported that Iran and the United States have reached a deal to revive a nuclear deal that could legitimately put the Islamic Republic’s oil back on the export market.

“Iran and the US have reached an agreement (on revival of JCPOA), and it will be announced in the next two or three weeks," a former IAEA official told Iran International, according to a news alert monitored by Investing.com.

Brent crude, the London-traded global benchmark for oil, settled down $5.78, or 5.5%, at $99.31 per barrel, after falling more than $6 earlier to a session low of $96.64. Brent closed Monday's session up almost 4%.

New York-traded West Texas Intermediate crude, the benchmark for US crude, settled down $5.37, or 5.5%, at $91.64 per barrel after a session low was $90.56. Just a day earlier, WTI jumped 4.2%.

Unless WTI experienced a quick bounce-back, it could return to the $88 lows seen in recent weeks, cautioned Sunil Kumar Dixit, a technical chartist for oil and strategist at SKCharting.com. 

"Technically today's price action was perfectly aligned with 50-Day EMA and Daily Middle Bollinger Band," Dixit explained, referring to the Exponential Moving Average for WTI.

"Unless a strong buying emerges from $91 - $88 range, WTI may succumb to bearish pressure and drop directly to $88.55, which marks a 61.8% Fibonacci retracement of its upswing from $62.43 to $130.50."

The JCPOA, or Joint Comprehensive Plan of Action, is the official description for the 2015 Iran nuclear deal hatched between Tehran and six global powers, under the aegis of the Obama administration. Donald Trump, the U.S. president after Barack Obama, canceled the JCPOA in 2018 and put sanctions on Iranian oil. President Joe Biden, who succeeded Trump, has allowed negotiations with Iran since last year to revive the deal.

Iran International is a Persian language television station headquartered in London, aimed at Iranian viewers, and broadcasting free-to-air by satellite. Its report could not immediately be verified with no official announcement coming out of Tehran or the United States. 

The identity of the former official of the IAEA — which stands for the International Atomic Energy Agency — is also not known. 

Adding to the pressure on oil were reports in Russian media that producer alliance OPEC+ was not discussing the possibility of production cuts yet.

Oil prices jumped almost $4 or 4% in the previous session as buyers plowed into the market on expectations of production cuts by the 23 countries in OPEC+.

OPEC+ — comprising the 13-member Saudi-led Organization of the Petroleum Exporting Countries and ten oil producing allies steered by Russia — is to meet on Sept. 5. 

Reuters reported that fuel demand had also been softened by an inflation-induced weakening of global economies. 

Inflation is near double-digit territory in many of the world's biggest economies. This could prompt central banks in the United States and Europe to resort to more aggressive interest rate increases, which could slow economic growth and weigh on fuel demand.

The European Central Bank should include a 75 basis-point interest rate hike among its options for the September policy meeting given exceptionally high inflation, Estonian policymaker Madis Muller said on Tuesday.

German inflation rose to its highest level in almost 50 years in August, beating a high set only three months earlier, data showed. Hungary's central bank raised its base rate by 100 basis points to 11.75%.

In the United States, policy-makers at the Federal Reserve appeared to be gearing towards the third 75-basis point rate in September, after raising rates by 225 since March. 

Unrest in Iraq has also failed to put a dent in the OPEC nation's crude exports, Reuters reported.

Baghdad's worst fighting in years between Shi'ite Muslim groups continued for a second day but Iraq's state-owned oil marketer SOMO said crude exports were unaffected.

Latest comments

hahahaha..TV says🤪🙃🧐
reviving the deal with iran is the right and only way to go. want a middle east without nukes? then force israel to give up theirs
Wow! You have a lot of anger.
BSPower Sure, don’t let facts get in the way of your deluded nonsense. have a good day now
If we want to force a nation to give up its nukes, there are so many better candidates to come first before Israel.
It's unfortunate that Iran accelerated its nuclear weapons program after ex-president Donald Trump unwisely withdrew the US form the deal. We'll have to wait to see the details of a new deal, but Iran does not yet have a nuclear bomb and cementing that status quo is an important objective for world security.
At any rate I said all I can say - this agreement is bad, you can't consider any military action while you are bound by an agreement that say that you agree to the terms presented, the terms presented even if Iran doesn't breach them this time (and they did last time) doesn't stop them from getting a bomb in 8 years, it's not a real period of time if you can't take military action in the duration and since we all know that Iran having a nuclear bomb is a bad idea, it's just a bad idea to allow this, that's really all, blame Trump, blame Obama blame Biden blame the teenage mutant ninja turtle if you want, the current situation being 'cemented' is a bad idea. Of course if magically Iran had to stop developing missiles, had to stop funding terror organizations, had to stop making military bases in Iraq and Syria and couldn't enrich Uranium above 5% ever with a military operation as the 'what if not' that could have been a great agreement, it's just not the one currently at hand.
  "can't consider any military action while you are bound by an agreement"  --  Yes, that would be a good reason to exit, except Trump made no/few moves to go kinetic despite Iran providing many provocations.  (And I never said the JCPOA was good.  I just questioned exiting it slowed down Iran.  I was questioning if no deal was better than JCPOA.)
And Trump/retrumplicans like to gloat how there's no new war under Trump, so there's a dissonance there.
Wow priorities of this administration. Let’s remove sanctions from Iran, rather than help negotiate with Venezuela whose people are suffereing and is in our back yard. Not to mention they have more oil than Iran
He is telling you that factually this deal is for the oil, Iran needs to be attacked while it's possible their reactors need to be destroyed there should be worse sanctions on them, end of story, meanwhile the oil can and should flow from Venezuela, it's a win win.
About Venezuela, yes you are correct.
Well, both should be done... An agreement with Venezuela and Iran... Kick Russian asses!
Great news! Now Iran can have nukes AND get billions from Europe and the US to spread terror all over the world, because those ****** didn't learn anything at all from Russia nor North Korea and didn't even learn any lesson from the whole ISIS situation, nope - we need discount on oil so the future of humanity can burn! If a problem will take 2-3 years to manifest that just means there's no problem right?
Yes! Yes! That was me! When I was only 2 years old. My, how I have grown.
My friend, I've enjoyed our little escapade, but all kidding aside and because I'm not so completely jaded as to ignore the humanity of people, even if pseudonymous on the internet: We could very likely find ourselves capable of having a respectful conversation over coffee. If we did, I'd tell you I'm concerned about your thought formation. I'd encourage to you deploy Occam's razor as your first reaction, to adhere to principles of reason and critical thinking, to learn how to analyze information for accuracy and truth, and to make a conscious effort to not fall into the trap of bias confirmation. If you have a chance, continue some formal education. Peace be with you. Your new bot friend -- beeep meep bop doop.
I like how you have the nerve to write this smug comment after I proved you wrong but I guess you aren't advanced enough to calculate any other response but crawl back defensively to some default 'You might be right this time, but you are still wrong to address me like a big meanie!' But that's ok, I am used to your type that's why I once again reiterate you are less than a bot, the bot would have ended on the how have I grown joke, just a lesson for you to learn in the future.
The way monentry policy makers are going about using QT to tame inflation could turn counterproductive if caution is thrown to the wind, it should be arithmetical rather than geometrical . Geometrical rate hike could breed hunger may be upheaval.
Money will give birth of another ****group. Every dollar of petro money ends up in terrorism...Why not take crude from Latin America
Deal with the Devil
Deal with the Devil
Watch what the mullahs do with the money. Can u guess?
Barani!!! LOL!!!
 Couldn't resist! :)))
They might order a customized Playstation to please and indulge in all uncanny whims 🤣
Been wondering what’s going on with oil, finally this is a satisfactory answer.
🤣🤣🤡 u.s doing all it can to keep rumors alive for some midterm votes🤣
SMFH Oh great! Hizboallah and IRGC celebrating taking over Iraq right now! Weak Men bring Bad times!
Youre calling boomers weak?
No, We worked hard to push Tyranical Ayatollahs to corner, next thing you know We giving them bonus’s.. entire Geopolitics is in trouble, from Afghanistan, Iraq, Europe and Tiwan. Like i said, Weak Men Make Hard Times..
There is no confirmation of this news as for now. This can be a very good entry point for bulls as $90/barrel and $88.50/barrel are potential Support points
Do you think they will say the petrol is the cause of inflation like we hear since the beginning of the year ????
Petrol has been in the basket of good/services economists price for inflation calculations for decades.
I think energy is not in the Core CPI? but you are right , high energy costs indirectly inflates every product or service made
Oh it was oil all along? and here I thought that maybe Obama's insane idea of 14 years of global 0% interest and artificially pumping real estate globally beyond control AND the recent attempt to fix the economy by printing money like crazy because the interest rate couldn't be lowered was MAYBE PARTIALLY a little bit responsible for the inflation much much before oil was an issue but I guess I am wrong it was just oil all along.
Buy Oil,and thank me later,there will be good movement during the Asian session
how foolish. Does the writer believe that US is God and can tell what is legitimate and what is not? Iranians do not give a ******to what Americans think.
Yeah, apparently their government does.
how foolish. Does the writer believe that US is God and can tell what is legitimate and what is not? Iranians do not give a ******to what Americans think.
Hello mate, chill. Read the story again, before commenting. For a deal to be announced, both sides have to agree, understand that. Notwithstanding that, I believed the JCPOA will be revived. Bests.
Do not trust anyone or any book that claim to speak for God.
News is fake,  complete lie,  no deal yet.
good job biden
Yes.  Putin causes energy price inflation and Biden lowers inflation.
LMAO
good job biden
good job biden
fake news by us media
crazy times, russia with china imports because of Ukraine, china close to war with taiwan and now us ask for Iran's help with oil 🤣
Doesn't make sense. It takes away from US exports to EU that take advantage of the WTI/Brent spread.
Why does the media keep mentioning $100 key price? Its all manipulated bulls**t.
 Maybe. But it's a huge three-digit number that's locked in people's minds, that's why.
Keep thinking, you'll get there.
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