Crude Oil Forecast Today 02/02:Crude Oil Looks Towards Iran

(MENAFN- Daily Forex) Most of what we are seeing in this market is likely to be due to the tensions with Iran Oil

The light sweet crude oil market initially fell to reach the $64 region on Friday before turning around and showing signs of strength. We currently see the $66 region as resistance, so pay close attention to that.

I suspect that much of what we are seeing in the trading markets today are people preparing for a potential strike against the Iranian government by the United States. This is something that will cause oil to spike for the short term until they realize that the oil infrastructure was not hit Tensions vs. Supply Fundamentals

If that is in fact the case, this might end up being a spike and then a nice selling opportunity. After all, the supply still outstrips demand by a wide margin with countries like the United States just flooding the market with crude oil. The US is now producing 13.5 million barrels a year and that is expected to go higher based on efficiency.

Furthermore, there are a lot of trade tensions out there, so that causes a little geopolitics to come into play. But if we are in fact going to see less trade, we probably need less oil. So this will end up being a nice shorting opportunity, but right now it seems like everybody's worried about the Iranian situation, which has been a situation my entire life basically and it always ends up being nothing.

I suspect that will be the case here as well. There is the possibility of the Iranians closing down the Straits of Hormuz, but with the US Navy in the neighborhood, that won't last long. That being said, you have a situation where eventually we go back to supply and demand, but we may have fireworks in the next trading day or 2.

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