Tips for Oil Investing in 2018

With the price of oil on the rise, the appetite for online is now higher as well. However, despite the good performance oil had in the last few months, there are still questions about how anybody can trade oil in a productive way. That is why in this article we will talk about some of the major economic and political events that could impact the price of oil in the second half of 2018.

The Iran deal saga

On May 8^th, 2018, the United States decided to withdraw from the Joint Comprehensive Plan of Action, also known as the Iran Deal. The United States President Donald Trump had been talking about the deal during his presidential campaign and threatened to take actions against it once he will take the oval office.

The Iran deal, one of the greatest achievements of Barack Obama and several other nations (China, France, Russia, United Kingdom, and The European Union) is no longer recognized by the US, raising again uncertainty in the Middle East.

Despite the move taken by president Trump, the other nations are determined to keep the deal in play, which could trigger economic sanctions from the United States.

Since oil exports from Iran are again prohibited by the US, prices had been going up. Market participants decided to invest in oil following the May 8^th decision and price volatility had also increased due to rising tensions.

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Iran has to go again to the negotiation table with the United States and as the current situation is showing, the country will have to agree to much tougher terms in order to avoid other painful sanctions.

The OPEC output

The last OPEC meeting came with an increase of the daily output with 600,000 to 800,000, motivated by the rise in the oil price. Following the news, the oil price had been under pressure for three weeks and then started to climb again, fueled by the Iran tensions.

Despite the rise of the daily output, the US President Donald Trump seemed not satisfied and told publicly that he would like the OPEC cartel to further increase the daily supply in order to cap the rise in the oil price.

There had been no action from OPEC thus far, but it is very likely that the country members will initiate talks for a further increase in case the oil price will continue to head higher.