MTECHTIPS:-Crude futures rally sharply, following long-awaited Iranian Nuclear Deal
WTI crude futures rose sharply on Tuesday afternoon, rallying from significant losses in the morning session after Iran and a group of western powers finally agreed to terms on a comprehensive nuclear deal, following months of wrangling and delayed negotiations. On the New York Mercantile Exchange, WTI crude for August delivery fell more than 2% to a session low of $50.90 a barrel, hours after a long-awaited completion of a deal. Texas Long Sweet futures, though, rebounded soon after, reaching an intraday high of 53.31, before settling at 52.95, up 1.45% on the session. Despite falling approximately 14% in recent weeks partly in anticipation of a deal, WTI crude futures have not dipped below $50 a barrel since early-April. In many ways, the rally in WTI crude on Tuesday afternoon was largely unexpected. A nuclear deal has been viewed by many industry experts as bearish for crude, as Iran reportedly hoards 30 million barrels of crude in its reserves ready for export. In April, for instance, crude futures plunged more than 4%, hours after the two sides agreed on a framework for a more extensive deal. Over the last several years, crippling economic sanctions have limited Iranian exports to approximately a million barrels of crude per day. Last month, however, Mehdi Asali, the Iranian representative to Opec, told the Iranian News Agency that the nation’s crude exports could double within six months of the lifting of sanctions. An outflow of Iranian oil could depress crude prices in a market already saturated by a glut of oversupply.