The oil comeback trade paused as the market awaited the jobs numbers this morning, observes Phil Flynn of the PRICE Futures Group.

Yesterday, oil prices dipped on ongoing India demand concerns and the fact that some members of the OPEC+ group are cheaters!

Oil dipped on a report that Opec+ saw its cumulative over production jump to 3.316 million bpd from 3.027 million bpd in February. Russia and Iraq are the biggest cheaters. While the market fretted about that, it was known that Russia had already indicated that they needed to produce more oil for domestic use and vowed to compensate later for their production indiscretions. Iraq said they would as well and has bigger problems with violence at the Kirkuk oil fields. Yet all of this might be a moot point as the global reopen trade may leave the market undersupplied. India reports 414,030 new coronavirus cases, the biggest one-day increase on record, and 3,919 new deaths. Still, price risks are to the upside.

Reported peace talks between Saudi Arabia and Iran may end the proxy war that has put supply at risk. This should reduce the oil risk premium if it happens. Yet closer cooperation between Saudi Arabia and Iran might also allow for greater cooperation. So, if sanctions are lifted in Iran, it may not upset the oil price.

Yet will sanctions be lifted on Iran? Will Iran come back to the table? The US Secretary of State Antony Blinken said that he is uncertain that Iran will return to the nuclear agreement. At the same time, the administration reports there could be a mutual understanding on the nuclear agreement. The official says that only time will tell. They said that the last three meetings have helped crystallize the choices that have to be made by the US and Iran. In the meantime, they said that Iran is “galloping forward” with its nuclear program and that its regional behavior is more aggressive. I guess galloping forward is worse than a trot forward or a canter.

RBOB is a bit weak but look for a demand rebound. The demand story will support prices bull spreads are in play on breaks. Diesel looks a bit stronger in the short term. Natural gas weakness should give opportunities to buy calls.

More green news! Zerohedge reported that, "As the green energy transition gains momentum, the broader transformation of the transport sector to electric vehicles will have profound changes in the automobile industry in Germany. For instance, more than 100,000 jobs in combustion engine production could be at risk, according to Munich-based Ifo Institute for Economic Research. Ifo released a report Thursday showing that more than 100,000 jobs in combustion engine production could be lost by 2025 if companies fail to reskill workers. "The transition to electromobility is a major challenge, especially for automotive suppliers, where medium-sized companies are dominant. It's important to maintain highly skilled jobs in the remaining production of combustion engines and electric vehicles without putting the brakes on structural change," said Ifo President Clemens Fuest.

Learn more about Phil Flynn by visiting Price Futures Group.