The positive talk around the Iran nuclear deal is weighing on oil, which is now down $2 on the day.
Crude is in danger of breaking the August low of $86.74, which was set yesterday. If it’s taken out that will be the worst level since early February. The combination of more Iran supply and a global economic slowdown is weighing.
In the bigger picture, this drop in oil prices comes at a bad time for oil bears. Companies are starting discussions on 2023 spending budgets now and hopes for more supply are taking a hit. This week, Aramco said capex would be at the bottom end of its range next year.
Moreover, that shortfall in investment will spillover to natural gas in associate wells in shale and elsewhere. There is some dry gas available but pipeline capacity may limit it even with gas up 4% and back above $9 today.