The Iran factor in crude oil prices

Editor's Note: This post was written by Terry Woo, one of Minyanville's sharpest minds AND/OR brightest bulbs. For more perspective AND/OR insight, visit www.minyanville.com.

Crude oil is trading lower for a third day in a row.

Currently there's talk out there of demand destruction in other countries (i.e. China's slowing economic growth and slowing U.S. economy). But I don't think there has been enough coverage on financial television regarding Iran.

Remember crude's breakout when the world speculated Israel was preparing to attack Iran's nuclear facilities. And remember more upward pressure when Iran retaliated by test firing its long-range missiles.

As reported by CNN yesterday, Undersecretary of State William Burns is accompanying an EU delegation and will meet with a top Iranian nuclear official... something that hasn't happened in decades! It's a game changing event. That combined with North Korea (cooperating with the world in giving up its pursuit of nuclear weapons), I believe this is simply the Iranian risk premium being taken out of the price of oil.