Supply, supply, supply
"Crude oil is tiptoeing, as traders are not fully sure if they want to go long or short. However, professionals are assured that the only direction they want to trade is towards the downside, given the glut we have on the market," Naeem Aslam, chief market analyst at AvaTrade said in a note.
And it's that word -- supply – that is key here, analysts say.
Mallinson at Energy Analyst said that beyond the immediate downward move in oil that any Iran nuclear agreement brings, focus would be on how much oil Iran could produce and how quickly.
Analysts estimate current Iranian oil production at roughly 2.75 million barrels of oil per day.
"I know the IEA (International Energy Agency) talks about quite significant volumes that could come back relatively quickly," Mallinson said. "But you can't ignore the technical realities of what happens when you switch off oil for several years. When you've had decades without access to Western expertise and consider the maintenance required, it isn't a straightforward process to switch oil back on. "
"I don't think Iran would be able to lift its underlying production by a significant volume in the months after the lifting of export sanctions – it might get to an additional 100,000 barrels per day of production. Nothing significant," he said.
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