Crude oil WTI sidelined as Iranian deal looms

• Crude oil shows little reaction to bearish EIA data and USD gyrations as the commodity sticks to its 67.30-69.00 range.
• The market is focused on the Iranian deal and May 12 is the key date on which Trump should make a decision.

Crude oil West Texas Intermediate is trading at around $67.68 per barrel up 0.30% on Wednesday. 

President Donald Trump must decide whether to reimpose sanctions on Iran before May 12. The decision could disrupt crude exports supply from Iran which is the third larger OPEC (Organization of the Petroleum Exporting Countries) producer. 

Meanwhile, the brief spike down in the greenback caused by the FOMC statement gave black gold an intraday boost above the 68.00 level but the market is now trading below the level already, in the 67.70 region. 

The market is unsure of what is going to happen with the Iranian deal and the price action reflects that as the market is trading in a range between 67.30 and 69.00. 

Earlier in the day, the Energy Information Administration (EIA) reported a strong build in crude oil stocks at 6.218M versus 0.739M expected by analysts. Although the news was bearish, WTI had no sustained directional moves as market participants are focusing on the Iranian deal. Moreover, nearly 80% happened on the West Coast which is an area far away from the North American market. “The West Coast in particular is very much of a niche economy. There’s just more attention paid to geopolitical concerns, like what’s going to happen with the Iranian sanctions and Venezuela production.” said Brian Kessens from Tortoise.

“Oil prices are reflecting concern about the Iranian sanctions. Most of the comments we are likely to hear for the next week or so are going to be very bullish for prices, lots of grumbling and grandstanding,” commented Michael Lynch, president of Strategic Energy & Economic Research.