MaxedOutMama
Friday, May 05, 2006
Oil Futures Drop, Iranian Official Issues Threats
Oil futures (expectation is controlling the market) dropped to $60.30 on Thursday based on flat domestic demand and higher supplies, but promptly reversed course on risk fears and ethanol supply problems. Marketwatch:
Do we expect to see Congress debating the pattern? No.
Do we expect to see Congress discussing the urgent need for more ethanol in the run-up to the 2006 elections? Yes.
Do I, at this point, really, really hate Congress? Yes.
Crude for June delivery was last up 6 cents at $70 a barrel in morning trading on the New York Mercantile Exchange. It traded between a high of $70.20 and a low of $69.70.Ethanol supply problems are concerning the markets:
Prices remained more than 2% below last week's closing level of $71.88, after having reached a one-month low of $60.30 on Thursday in a continued response to the first week-to-week buildup in U.S. gasoline supply in more than two months. See full story.
But early Friday, Iran accused the U.S. and its allies of creating a "crisis where a crisis is not needed," by tabling a United Nations resolution calling for Tehran to stop enriching uranium.
Kerr, who also edits Global Resources Trader, a newsletter service of MarketWatch, the publisher of this report, said the market is likely missing supplies of the blending material, ethanol. "This build is likely the last one we will see in gasoline for a long, long time," he said.It's not oil supply that is the problem:
"The ethanol specifications will continue to hamper gasoline supplies," he said, referring to certain fuel requirements that have come into effect this month. And on the cusp of "hurricane season with three refineries already down -- it could be a very long summer."
Meanwhile, crude supplies rose 1.7 million barrels for the week ended April 28, to total 346.7 million -- their highest level since May 29, 1998, the Energy Department said. That was a bigger increase than the market expected and supplies are 5.3% above the year-ago level.And US gasoline demand is known to be flat and may well be dropping:
Separately, the API reported that crude supplies rose 2 million barrels to 346.9 million.
Data from the Energy Department show "no growth in gasoline consumption over the last year, and this number could turn negative next week," said James Williams, an economist at WTRG Economics.And then came the Iranians. Reuters:
Khatami, no relation of the former liberal President Mohammad Khatami, is a hard-liner who sits on the Assembly of Experts, the body of 86 clerics that constitutionally supervises Supreme Leader Ayatollah Ali Khamenei.Now the "bullying resolution" has no teeth whatsoever, so it is hardly likely that Iran feels threatened by it. The "bullying resolution" comes with an explicit promise that it will not be enforced:
"Iran is a strategically sensitive part of the region. Be assured that Iran's insecurity means insecurity for the Middle East and the smoke will sting your eyes too," he added, in remarks broadcast live on state radio.
...
"If you take the path of confrontation instead of the path to negotiations ... you should know that the reaction of the great Iranian nation will be something that the enemy will regret for ever," Khatami added.
U.S. and EU diplomats hope they can convince permanent Security Council members China and Russia to back their draft resolution by specifying that this resolution will not provide a basis for sanctions or military action.There's a pattern developing, isn't there? Oil futures dropping $10 a barrel in a week are a nasty hit to the Iranian pocketbook. This is the dire evil Khatami wants to ward off.
Do we expect to see Congress debating the pattern? No.
Do we expect to see Congress discussing the urgent need for more ethanol in the run-up to the 2006 elections? Yes.
Do I, at this point, really, really hate Congress? Yes.
Comments:
<< Home
First things first.
Let's take etanol out of the equation, because IT'S SMOKE AND MIRRORS. Take away goverment subsidies and the ethanol economics go away.
Next. The Iranians and NOT the Americans are exploiting oil prices. The 'nuclear' scare is crap. If the Iranians ever build a bomb and use it, the country will become a glass parking lot.
The Arabs in the region will come to understand that either we or the Israelis will have a much lowered tolerance level for their antics.
They will lower the price of oil and begin to behave in acivilized manner.
As for Iran, I would encourage you to read this:
http://sigcarlfred.blogspot.com/2006/05/lesson-one-from-sca-school-of-foreign.html
Let's take etanol out of the equation, because IT'S SMOKE AND MIRRORS. Take away goverment subsidies and the ethanol economics go away.
Next. The Iranians and NOT the Americans are exploiting oil prices. The 'nuclear' scare is crap. If the Iranians ever build a bomb and use it, the country will become a glass parking lot.
The Arabs in the region will come to understand that either we or the Israelis will have a much lowered tolerance level for their antics.
They will lower the price of oil and begin to behave in acivilized manner.
As for Iran, I would encourage you to read this:
http://sigcarlfred.blogspot.com/2006/05/lesson-one-from-sca-school-of-foreign.html
Yes, the wild and zany world of an oligarchic theocracy does not make for a smooth ride.
There's a good article by Amir Taheri explaining the labor unrest.
Post a Comment
There's a good article by Amir Taheri explaining the labor unrest.
<< Home
