Wrap up: "Oil price reaction muted to Iran nuclear deal"

Following up on yesterday's "Société Générale: Initial Impact on Oil Prices From Iran Deal Should Be 'Muted'".
From the Financial Times:

Oil prices fell on Monday morning after Iran agreed the deal with world powers on its nuclear programme. As the market recovered, however, many traders are asking: why did they not move more?

 

The fate of Iranian sanctions, which have cut Iran’s exports in half over the past year and led Saudi Arabia to pump at unprecedented levels to fill the supply gap, has been a wild card for the oil market all year. 

As US shale production booms, some analysts had tipped a breakthrough on Iran to push oil below $100 per barrel, providing welcome relief to a global economy labouring under high energy prices.

Instead, market reaction to the deal has been muted. Brent, the international benchmark, fell by almost $3 to $108.05 per barrel before recovering, with prices remaining several dollars higher than when negotiations began in Geneva last week.

“In normal market conditions, when such a huge cloud over supplies leaves the market, you would expect a much bigger reaction,” said Miswin Mahesh at Barclays....MUCH MORE

Yes both the FT and the BloomPo headlines used the word muted which is a pretty good description.
The verb would have been very different had the agreement allowed a million barrels a day to come on the market. In that event the we'd probably be looking at:

 Nov. 6: 

"Return of Iran crude may spark OPEC 'price war'"

If Iran can resume exporting 1mm bbl/day I'd look for a quick overreaction $20 haircut for both Brent and WTI ($105.62, $94.40). And then depending on how fast Saudi Arabia cuts production that should narrow to a $10 decline....

See also:
"Iran and the oil markets"