WCU: From bad to worse as Iran crushes crude


What is certain, however, is that an overhang of already-produced and now stored supplies in Iran will be looking for a home as soon sanctions are lifted. Mapping surveys from Reuters indicating that several very large crude carriers with capacities of two million barrels each are almost fully loaded and ready to set sail. This will apply some additional pressure in the short term, not least considering the limited success oil had in trying to establish support above $30/b during the week. 

The impact of the extra barrels from Iran has already had a profound impact on the price relation between Brent and WTI crude as well.

Geopolitical risks and supply worries combined with rapid rising production in the US saw WTI crude enter into a discount against Brent back in 2010. The recent removal of the US crude export ban saw WTI and Brent merge. The extra barrels from Iran are now applying some additional pressure on Brent crude, the global benchmark. 

As a result we have seen WTI crude regain its premium status all the way out to December 2017. (by Ole Hansen, TradingFloor.com)