On a day when crude oil stocks in Cushing, OK reached all time highs, crude oil prices fell to six-year lows, surpassing the lows set back in January.
Then I ran into this item, which talks about the possibility of prices dropping further if the United State and Iran can reach a deal on their nuclear talks. An accord may allow Iran to begin pumping more crude into an already oversupplied market.
“There’s no guarantee a nuclear deal will be reached and even if one is, it will take time to lift sanctions and for Iran to ramp up production. Talks resumed between the U.S. and Iran on Sunday, and the White House recently said there’s a 50/50 chance of an agreement.
Still, industry observers believe the oil markets would likely react negatively to a deal.
“If the market is looking for a trigger for its next fundamental move downward, the perception of sanctions relief could pave the way,” Barclays wrote in a research note on Monday.
It’s that psychological effect that could be a real good buying opportunity, as there would still be significant hurdles for Iran to overcome in order to get their barrels to market, which you can read in in the item.
Even if you’re not feeling like buying right now, I would strongly suggest you map out a plan or zero in on a target number or stair step of numbers…be ready to move on the dip because they often times are fleeting.