The spot WTI crude oil price, traded on the Chicago Mercantile Exchange, swung between gains and losses on Tuesday and closed up 2.61% at U.S. $53.37 a barrel, after the P5+1 countries, which include the U.S., Russia, U.K., France, China and Germany, announced late Monday that they reached a nuclear deal with Iran. The Obama administration needs to submit the nuclear agreement to the U.S. Congress for a 60-day review before they vote to accept or reject it. If the deal is approved by the U.S. Congress, it could eventually pave the way for the return of about 1 million barrels a day of Iranian crude to global markets. Mr. Obama promised to veto any bill that blocked the Iran nuclear deal, hence the U.S. Senate needs 67 votes to override his veto.

After reevaluating the actual timeline, traders decided that it still could be another year before any substantial amount of Iranian crude oil makes it way to the markets, if the U.S. Congress approves the deal. In fact, Iran is already a major supplier to China, India, Japan, South Korea and Turkey. How fast Iran can ramp up deliveries to those countries is anyone’s guess. As reported by MarketWatch, Iran has at least 34 supertankers full of oil, which is about 50 million barrels or more, ready to be delivered if sanctions are lifted. 

Meanwhile, Saudi Arabia, the world’s largest oil exporter who pumped 10.56 million barrels a day in June which was up from 10.33 million barrels a day in May, is showing no signs of slowing down and has made it clear that it has no plans to slow production, even if the Iranian oil sanctions are lifted.

The American Petroleum Institute (API) said in its weekly crude oil inventory report late Tuesday that crude inventories fell by 7.3 million barrels for the week ending July 10, while the crude stocks at Cushing, Oklahoma, the delivery hub for U.S. crude contracts, rose by 420,000 barrels. The U.S. Energy Information Administration (EIA) will release its weekly petroleum status report on Wednesday. The market is expecting the crude oil inventory to fall by 2.1 million barrels. Baker Hughes [NYSE:BHI], the U.S. largest oilfield services company, said on Friday that the number of active oil drilling rigs climbed by 5 to 645, down almost 60% from the record highs of 1,609 set in October 2014.

As of July 7, there are 479,372 long positions of non-commercial contracts of light sweet crude oil futures, traded on the New York Mercantile Exchange by swap dealers and hedge funds, an increase of about 6,138 long positions from June 30, according to the Commitment of Traders (COT) data released by the Commodity Futures Trading Commission (CFTC) each Friday. This is compared to about 444,990 short positions, an increase of about 25,953 short positions from June 30 where light sweet crude oil contracts are traded in units of 1,000 barrels.

Technically, the WTI crude oil price has been trading in a falling wedge chart pattern as hedge funds were exiting the crude oil trade last week. The crude price is now bouncing around the U.S. $52.50 a barrel level. The crude price could bounce near-term to test the U.S. $54.24 a barrel level as the crude oil price is trading near oversold territory. The crude oil price may get some tailwinds from a weaker dollar, as the latest data shows the U.S. economy seems to be wobbly again.