While Iranian output has slipped by some 200,000bpd year-on-year, Iran’s gentle downwards slope has been more than made up by increases elsewhere. While there are all sorts of shades of grey in between, there are two extreme scenarios on Iranian output for the rest of the year.
* In one, the EU sanctions take effect and are maintained, and in addition Iran struggles to market the displaced crude, reducing net Iranian exports by as much as 0.8 mb/d. * At the other extreme, nuclear issues are settled swiftly and benignly or are at least put on ice, EU sanctions are eased and there is no significant reduction in Iranian net exports. A large proportion of the former scenario was priced in, but very little is currently priced in after the pull-back in prices. Should the latter scenario emerge, then one should expect some compensating reduction in Saudi Arabian output over the course of Q3. However, for the moment, the market mood remains highly relaxed and sideways remains the path of least resistance.
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* In one, the EU sanctions take effect and are maintained, and in addition Iran struggles to market the displaced crude, reducing net Iranian exports by as much as 0.8 mb/d. * At the other extreme, nuclear issues are settled swiftly and benignly or are at least put on ice, EU sanctions are eased and there is no significant reduction in Iranian net exports. A large proportion of the former scenario was priced in, but very little is currently priced in after the pull-back in prices. Should the latter scenario emerge, then one should expect some compensating reduction in Saudi Arabian output over the course of Q3. However, for the moment, the market mood remains highly relaxed and sideways remains the path of least resistance.
For more information Click Here
Stock tips, Commodity tips
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