US crude was down 19 cents per barrel, closing at $48.68. This came after US officials reported a 50/50 potential of an agreement with Iran regarding Tehran’s nuclear program that could end Western sanctions. Six other world powers are involved in the negotiations, which have reportedly made progress. Expectations are that an agreement of some sort will be reached before the talks conclude.
This makes sense, since Tehran is anxious to make up a deficit that has occurred with their crude exportation, starting in 2012. Their daily exports are capped at one million barrels, when previously they were exporting 2.5 million barrels per day. The consensus is that two possibilities exist for the agreement: an extended deadline or a framework agreement.
For now, global markets are sufficiently supplied, with supply overshadowing demand by 1.5 million barrels per day. Lower oil prices have made some oil production companies make the decision to halt drilling efforts, although this change will not show in the oil production rates until later in the year.
The strength of the dollar rose, while the euro fell. This issue for the euro is partly due to concern that Greece, which is slated to run out of money in three weeks, will not be able to secure the help it needs to stay afloat.
According to Greek Prime Minister Alexis Tsipras, the issue will be stopped without causing concern for pensions and VATs. Tsipras also noted that the country needs a new debt restructuring deal and also needs to stop “pillaging” the middle classes. Raising sales tax on food and medicine has also been vetoed by Tsipras, causing some concern and not lending much faith the issue will be resolved in the narrow window left to the country. Tispras noted these measures and interfering with the labor market could mean a fall back into recession for the country.