Apart from Iran, traders fear that Venezuelan production will continue to decline, which could bring a deficit of global supply at some point. Against this backdrop, despite the dollar bullishness, Brent climbed above the $85 threshold for the first time since early-November 2014 yesterday. On Tuesday, we see some profit-taking and a retreat of prices below the key handle.
In a wider picture, as the barrel is getting closer to $100, supply-side fears could be replaced by demand-side concerns as the elevated prices may derail the global demand and erode the economic growth, especially amid the ongoing US-China trade war and the decline in many emerging market currencies. And this is a risk for a $100 scenario.