Oil rebounds from the lows as word on Iran nuclear deal awaited

Earlier reports said we would get word on the Iran nuclear deal by midnight Tehran time but now there’s talk that could be pushed another day.

WTI crude oil prices are down $2.77 to $89.36 but are $2.50 from the lows of the day. That partly reflects an improvement in risk appetite in the markets but must also surely reflect the evolving views on this deal.

For one, it will take some time for this deal to go into effect so the front month probably isn’t the best place to judge. That said, further out the oil curve, futures are down less. So that may point to China as having a larger effect today.

For now though, we’ll wait on official word and see how the market reacts. The August lows have held today on the first test but if a deal comes through it will be a much tougher test.

ZeroHedge has a good recap of the latest comments and takes a positive view.

“Iranian officials noted a key caveat of “Further nuclear talks will be needed if the US refuses to show flexibility,” strongly pointing to an expected positive assent. It’s also a rare moment Iran’s leadership has voiced willingness to compromise.”

My read is that we’re going to be stuck in the grey area for awhile because Iran still wants to negotiate.