Summer of 2018 is almost over, put the action in the Oil market might be just getting heated up with many unresolved issues on the way to keep in mind.

Iran’s National Oil Company was seen dropping crude prices in an attempt to retain its current buyer’s interest amid it’s obvious August exports drop.

It is estimated that the price discount is the lowest in almost 15 years, which is a good bargain and could be a win win situation for the purchaser and the seller.

Iran on the one side could close huge deals as the bigger the discount the bigger the volume and eventually unload more oil.

At the same time a huge oil consuming country could easily cover its demand with the current trading conditions.

On the other hand, data confirms an opposite scenario.

Oil purchases by its key customers have all plunged in August as various buyers, banks and insurance companies have already suspended dealings in Iranian oil.

Starting with China, with imports forecasted to drop to 18.4 million barrels in August compared to Julys 24 million barrels in which was its highest monthly volume this year.

Japan’s oil imports have been reduced for the second consecutive month to 3.4 million barrels in August.

Yet, Japanese refiners could keep ordering Oil from Iran until mid-September so they will arrive in Japan before November thus, dodge US sanctions and still have its supply in place.

Shipments for Europe have also dropped to about 12 million barrels in August, compared to 22.2 million barrels in March down.

The data indicates most of the world is walking away from Iran, not for personal issues with the Middle Eastern country but because the United States is pushing Tehran to negotiate a new nuclear agreement.

From Latin America, a Venezuelan firm PDVSA, which is government controlled stated it had signed a new agreement to rise production by 640,000 Oil barrels per day, valuing the investment at $430 million.

Venezuela is actively making attempts to increase its oil revenues which have struggled with declining output in previous years forced by a worsening economic crisis.

On another front, countries are now building further Oil supply levels in order to counter the next few months moving into winter, when demand for Oil would probably increase.

Specifically, China’s private Oil refiners have increased their foreign oil purchasing heading towards the end of the summer maintenance, they have undergone.

The event, could be the reason behind the recent increase of physical prices of Middle Eastern and Russian Oil to their highest in months.

According to Reuters, Chinese firms imported 6 million tons of black gold in August, increasing imports by 40 percent compared to July.

We could move into a different price range if the abovementioned matter persists and is followed by other countries at the same time.

Prices could get further support if the market anticipates any signal of increased demand and suppliers cannot provide.

This opinion is also supported by International Energy Agency head who stated that oil supply markets might tighten heading to the end of this year due to strong demand and uncertainty building up.

In our opinion, uncertainty could build on unstable production from countries in the Middle East.

In addition, no matter what demand or supply levels are required, no matter the number of increased or decreased exports or imports, what happens with Iran is of great importance for the Oil market.

Not only different continents will be affected by the discontinuation of business with Persia, but Iran is currently the third-largest producer among the members of the Organization of the Petroleum Exporting Countries and that gap could take time to be filed.

It must be noted that crude oil has surpassed both of our 2 previous resistance levels 66.79 (S3) and 67.75 (S2) both levels have now turned to support lines.

Crude oil has been on an upswing since last week and is currently trading around our 68.75 (S1) support level which is seemingly a very important level as the trading activity in the past sessions has been very close to that area.

If the bulls continue to dominate the Crude Oil market we could see it breaking the $69.61 (R1) resistance level and move even higher towards the $70.40 (R2) resistance area.

This scenario could be most probable if the EIA weekly figure is released with a drawdown as forecasted or even wider, later today.

If any evidence of over supply is released within the news, we may see a bearish sentiment overtake the commodity.

In this case, Crude Oil could break the $68.75 (S1) support level and move even lower towards the $67.75 (S2) support barrier.