Markets reopened Sunday night, with nearby Brent Crude Oil Futures now at $116, up 3% from Friday's close, and $12 higher than the low set after Trump extended the talks until April 6.
Are you surprised we are seeing headlines like this crossing now?
* PRESIDENT TRUMP BRIEFS REPORTERS ON AF1
*TRUMP ON IRAN DEAL: COULD BE SOON
*TRUMP: I DO SEE A DEAL WITH IRAN
*TRUMP: IRAN CAME BACK TO US ON 15-POINT PLAN
*TRUMP ON 15-POINT PLAN: IRAN GAVE US MOST OF THE POINTS
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As I wrote in the repost, the market doesn't believe him. These talks are a stall, and the longer they go on, the higher crude oil prices go.
(To be clear I'm criticizing the messaging, not the objective)
So, while I'm sure the algos will react to these headlines, let's see how long it lasts.
Remember, the only headline that would really cause oil to plunge is an IRANIAN effectively saying what Trump said.
Instead, these Trump statements most likely are viewed by Iran as they are winning, and Trump's insistence that they are close to a deal is viewed as weakness on his part.
If he is stalling for the Military to get in place, they say something like...
We'll keep talking to give peace a chance, but note every day we go without a deal, the Marines get closer to the Middle East, and you (Iran) don't want that.
Quoted context
These are the quoted author’s words.
When Trump announced a delay to the bombing on Monday morning, crude oil futures immediately fell 10%.
Compare this to the reaction to yesterday afternoon, when he extended the delay another 10 days (red box). It was short-lived, and now, about 12 hours later, prices are meaningfully higher.
I believe the market signal is that the Strait must be opened, and the military must do it. The longer we delay starting this process, the higher crude oil prices will go. All Trump did yesterday was add 10 more days to the ongoing supply shock.
Any further statements by Trump about a deal are white noise to the markets. Only if the IRANIANS say the talks are going well will it impact markets.
Why isn't the crude oil market substantially higher ($150+), like many are asking? I would argue that the market believes the military can open the Strait. But it will be "messy."
In other words, there are no good choices, only ones that are less bad.
biancoresearch ↗