The 2 April framework agreement between Iran and the P5+1 has raised the prospects of a final accord being reached on Iran's nuclear deal before 30 June and a removal of sanctions on Iran's oil exports and around 1mb/d of low cost oil returning to the market.
A deal would be likely to have a negative effect on the crude oil spot price but also result in a steeper contango as the market would price in some risk of Iran not living up to its obligations. It will also put pressure on tight OPEC fiscal positions.
We keep our forecast of a Brent crude oil price at USD76/bl in Q4 this year and USD78/bl in 2016. Prices in the forward market are below our forecasts and thus we recommend clients on the consumer side hedge exposure.
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