Oil Price Fundamental Daily Forecast – Markets Supported by Unrest in Iran

U.S. West Texas Intermediate and internationally-favored Brent crude oil futures are trading higher early Tuesday in response to large anti-government rallies in Iran. Additionally, the market posted its strongest opening to a new year since 2014, underpinned by the OPEC-led supply cuts.

At 0728 GMT, February WTI crude oil is trading $60.66, up $0.24 or +0.40%. March Brent crude oil is at $67.22, up $0.35 or +0.52%.

Traders are optimistic that the rally which ended 2017 would continue into the new year especially since the two crude oil markets opened the year above $60 per barrel for the first time since January 2014.

Fundamentally, the market is being supported by on-going cuts in production by OPEC and Russia, and last week’s pipeline explosion in Libya.

Today, the market is being underpinned by geopolitical tension in Iran. Anti-government protesters demonstrated in Iran on Sunday in defiance of a warning by authorities of a crackdown, extending for a fourth day one of the most audacious challenges to the clerical leadership since pro-reform unrest in 2009.

Gains could be limited today because as of December 30, the 450,000 barrel per day (bpd) capacity forties pipeline system in the North Sea returned to full operations after an unplanned shutdown.