After a short-term pause and failed corrective attempts on Wednesday, Brent crude resumed the rally today, with prices refreshed early-November highs at $74.55. The market continues to derive support from the “Iranian factor” after the United States said early this week it would end all exemptions for sanctions against the Middle Eastern country.
The EIA report yesterday was bearish, with US crude oil production has risen to a record of 12.2 million bpd again, while crude oil stockpiles hit an October 2017 high of 460.63 million barrels. However, the negative market reaction was rather subdued and short-lived, which confirms that traders are still focused on the Iranian sanctions and their potential consequences on the supply side.
In the short term, Brent will likely stay elevated and could even extend the rally as concerns over supply glut persist, especially after Saudi Arabia signaled it won’t ramp up crude oil production any time soon despite the end of sanction waivers for all Iranian oil customers.