FILE – In this April 23, 2018, file photo, the logo for ExxonMobil appears above a trading post on the floor of the New York Stock Exchange. (AP Photo/Richard Drew, File)

Thomas H. Kee Jr. is president and CEO of Stock Traders Daily.

The oil market has priced in an almost guarantee that President Donald Trump will scrap the Iran Nuclear deal and no one will be there to pick up the slack in the market. However, when he announced that he will reveal this decision on Tuesday, four days before the deadline, the tone in the oil space changed.

Oil traders recognize that the worst-case scenario has been built in to current oil prices. Anything less than that would likely cause oil prices to decline. This was the tone in the oil space in the last hour of trading on Monday. The worst has been built in to oil prices, and after the decision is released on Tuesday reconsiderations are likely.

Frankly, I do not know what the decision is going to be, but Trump’s rhetoric has clearly been pointed at dissolving the deal for some time. I do not know if he can justify that, and I am relatively certain that other participants in the deal do not want to see it scrapped — so the decision is not nearly as absolute in my eyes as it seems to have been in the eyes of traders over the last two trading sessions.

The action on Friday and earlier Monday in oil may very well have been trading oriented long positions that wanted to take advantage of a run-up ahead of the decision that was expected to come on the 12^th. The reconsideration I am seeing exists because the decision is going to come Tuesday instead, and those buyers who pressured prices higher Friday and early Monday did not necessarily want to hold through the decision.

Unless the decision is a worst-case scenario, the price of oil is likely to fall again into a much more balanced price range.

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