Oil Prices Surge After Trump Removes US from Iran Deal; US Dollar Supported by Rising Bond Yields
Published May 9, 2018
US President Donald Trump officially withdrew from the 2015 Iran nuclear deal which aimed to deny Tehran the ability to build nuclear weapons; during yesterday’s televised announcement, Trump pledged to reinstate economic sanctions against the Iranians.
The US withdrawal from the Iran deal will commence over a 6-month period, allowing oil markets and other major stakeholders to prepare; other international agreements such as the Trans-Pacific Partnership and the Paris Climate Accord have continued without US support, however, it remains to be seen if the EU can independently keep this deal alive with Iran.
Oil prices initially slid yesterday but have since recovered with a near 3 percent surge in prices this morning; the commodity’s value is topping 2014 highs as analysts expect Iran to face great difficulties in exporting their oil in light of strong economic sanctions from the US.
Analysts will also look to the release of US Energy Information Administration’s weekly data on US oil supplies at 10:30 AM EST. Other data of note includes US purchasing price indices and Canadian month-on-month growth for new building permits.
The US dollar remains strong this morning as US bond yields continue to rise, indicating strengthening inflation prospects for the US economy. US stocks are pointing to a higher open this morning as markets continue to assess the ongoing impacts of Trump’s Iran decision.