Oil Price

With concerns about Iraq's production capabilities near term in abeyance, West Texas crude
is trending down to a normal seasonal low through July toward $98 bl. The mild uptrend in
crude since late 2013 makes it clear supply is not substantially constrained relative to demand.

The next period of seasonal strength for the oil price runs from late Jul. until the end of Sep.
Barring a major supply disruption, hopes for a big upside finish in the price are fading. My
guess here is that the best oil can do through Sep. is about $110 bl. Moreover, the sharp break
in the price since fears of Iraq production cuts have abated, suggests that the expected  $98
seasonal low which lies just ahead may not be all that secure. WTIC Crude

The deal restricting Iran's nuclear materials output is supposed to be inked on Jul. 20. There
has been a little more progress in recent days, but the ayatollahs are getting balky on the
premise that Iran should have greater freedom over the long run to develop their program.
So, it may be that Jul. 20 will pass by without a firm deal. If so, there will be calls to give the
negotiations more time. Some in the Congress here will say nasty, hawkish things, and Obama
will come under increased pressure to nail down a strong deal. With all that though, it may still
be early to drag the 'bomb Iran' scenarios out of mothballs. However, if there is no deal soon
the hawks in D.C. will use the impasse to flog Obama ahead of the Nov. off year election and
Bibi in Tel Aviv can be expected to weigh in as well. Oil traders will have to pick up the
threads soon.