Showing posts with label Iranian. Show all posts
Showing posts with label Iranian. Show all posts

Monday, January 23, 2012

European Union Ban on Iranian Imports Give Crude Oil Bulls a Boost

March crude oil closed higher on Monday for the first time in four days after the European Union agreed to ban crude imports from Iran, raising concern that retaliation from the Islamic Republic may disrupt oil supply from the Middle East. A 27 nation bloc indicated that it would implement the crude embargo starting July 1 to pressure the country over its nuclear program.

Iran has threatened to close the Strait of Hormuz, the transit point for about a fifth of global oil, if its exports are banned. The high range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near term.

If March extends this month's decline, December's low crossing at 92.95 is the next downside target. Closes above the reaction high crossing at 102.24 would confirm that a short term low has been posted. First resistance is the reaction high crossing at 102.24. Second resistance is this month's high crossing at 103.90. First support is today's low crossing at 97.40. Second support is December's low crossing at 92.95.

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Friday, January 20, 2012

OilPrice: China to Aid Saudi Arabia in Nuclear

Ever since the end of World War Two, the U.S. has come to regard Saudi Arabia as almost its exclusive oil producing enclave.

In February 1945, after the Yalta Conference with Soviet General Secretary Iosif Stalin and British Prime Minister Winston Churchill, on his way home U.S. President Franklin Delano Roosevelt and King Ibn Saud met aboard the New Orleans class heavy cruiser U.S.S. Quincy in the Suez Canal’s Great Bitter Lake. During the meeting, instigated by Roosevelt, he and Ibn Saud concluded a secret agreement in which the U.S. would provide Saudi Arabia military security, including military assistance, training and a military base at Dhahran in Saudi Arabia, in exchange for secure access to supplies of oil.

Sixty seven years later, my, how things have changed, as China is now muscling into the Kingdom of the Two Holy Places.

On 15 January Visiting Chinese Premier Wen Jiabao and Saudi Arabian King Abdullah bin Abdul Aziz agreed to make concerted efforts to enhance bilateral relations. The spectacle of OPEC’s leading petro-state and East Asia’s superpower economy making common cause has surely caused the burning of the midnight oil inside the Beltway.

While Wen said that China is willing to strengthen coordination with Saudi Arabia on all major issues by expanding cooperation in trade, investment, infrastructure, high-tech, finance, security and law enforcement, what must have surely caught the eye of Washington’s mandarins was him adding that China intends to develop a cooperative partnership with Saudi Arabia in the energy sector.

And why not? Saudi Arabia is the largest supplier of oil to China and bilateral trade between the two countries soared to $58.5 billion in the period January-November 2011.

And the fruits of such bilateral proximity were on the table even before Wen made his fulsome remarks, as the state-owned Saudi Press Agency reported on 14 January that Saudi state oil giant Aramco has signed an agreement with state owned giant China Petroleum and Chemical Corporation Ltd. (Sinopec) to build an oil refinery, named Yasref, in the Red Sea city of Yanbu, which will become operational in 2014, processing 400,000 barrels per day.

What is really going to catch Washington’s and the foreign investment community’s attention is how the agreement is structured, Saudi Aramco will hold a 62.5 percent stake with Sinopec holding the remainder.

In one of 2012’s greatest understatements, Aramco president and CEO Khalid al-Falih said that the contract "represents a strategic partnership in the refining industry between one of the main energy producers in Saudi Arabia and one of the world's most important consumers."
Continuing his victory lap around the western shores of the Persian Gulf, Wen will also visit Qatar and the United Arab Emirates, two other stalwart U.S. allies.
And the eastern side of the Gulf?

Commenting on Iran, China’s third largest source of oil imports, on 11 January Chinese Foreign Ministry spokesman Liu Weimin said at a press briefing that China will maintain its trade ties with Iran despite efforts by U.S. Treasury Secretary Timothy Geithner to convince Beijing to join a proposed embargo of Iranian oil exports.

But perhaps the most intriguing element of the Riyadh-Beijing lovefest was the announcement that on 15 January Saudi Arabia signed an agreement with China for cooperation in the development and use of atomic energy for peaceful purposes, an event of significant importance that both Abdullah and Wen attended.

No comment is really needed here, except to note that many of the questions asked about Iran’s civilian nuclear power program, such as why does a leading "petro state" need nuclear energy, are unlikely to be asked about this particular venture, underling that once again, reality in the Middle East is whatever your perceptions tell you in advance it is.

Posted courtesy of John C.K. Daly at Oilprice.com


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Saturday, January 14, 2012

ONG: Weekly Fundamentals..... Geopolitical Tensions Drive Crude Oil Volatility

Geopolitical tensions have been directing the movement of oil prices since the start of the year. Sanctions against Iran in condemnation of its nuclear developments had sent oil prices higher. The US has imposed sanctions against Iran's central bank and it's highly likely that Japan and South Korea will reduce their imports of Iranian oil. The EU has in principle agreed ton an embargo on oil imports. 
However, an EU embargo on Iranian oil imports will likely be delayed for 6 months so that countries including Greece, Italy and Spain can find alternative supplies. Data from the European Commission indicated that these three countries accounted for 68.5% of EU imports from Iran in 2010. The news triggered a sharp selloff in oil prices on Thursday and Friday. In Nigeria, President Goodluck Jonathan will meet protesters in an attempt to end the 4 day strike which will affect the oil industry. Oil prices should continue to move with great volatility in coming months as long as geopolitical tensions remain uncertain.
The DOE/EIA released its monthly short-term energy report last week, suggesting the price of WTI crude oil would average about 100/bbl in 2012, up +5/bbl from the average price last year. For 2013, the agency expects WTI prices to 'continue to rise, reaching 106/bbl per barrel in the fourth quarter of next year". Concerning global oil demand/supply, the DOE/EIA expects the tightening of world oil markets would 'moderate in 2012 and resume in 2013'.
Oil demand will probably increase +1.27 mmb, or +1.44% y/y, to 89.38 mmb in 2012. This, however, represents a -0.14 mmb drop from the projection made in December. The DOE/EIA also introduced the demand forecast for 2013. During the year, consumption will climb +1.47 mmb, or +1.44% y/y, to 90.85 mmb. On the supply side, non-OPEC supply is expected to rise +0.91 mmb, or +1.76%, y/y to 52.76 mmb in 2012, followed by a +0.76 mmb, or +1.44%, increase to 53.52 mmb in 2013. The need for oil supply from the OPEC will be 30.30 mmb and 30.76 mmb in 2012 and 2013 respectively.

Friday, January 13, 2012

Rigzone: Crude Oil Falls As Euro Zone Woes Resurface

Crude futures fell Friday in tandem with a slumping euro as Standard & Poor's prepared to downgrade France's credit rating, adding new fears about Europe's economy.

The ratings service notified the French government and other European governments that it will lower their debt ratings, according to reports Friday, sending the euro to 16 month lows against the dollar and taking the wind out of riskier assets such as oil, stocks and other commodities.

The news of imminent downgrades renewed worries about a potential stumbling block for the global economy, and oil demand. Traders quickly switched gears to focus on Europe's credit crisis after a sell-off Thursday was sparked by potential delays to the E.U. embargo on Iranian oil.....Read the entire Rigzone article.

Tuesday, December 27, 2011

Merry Christmas Crude Oil Bulls.....From Iran to You!

Crude oil bulls get a Christmas gift from our friends in Iran, but will it hold? Oil closed above $100 a barrel for the first time in nearly two weeks on geopolitical news out of Iran along with the perception of U.S. consumer confidence. The higher close extended the rally off last week's low. This high range close sets the stage for a steady to higher opening on Wednesday.

Stochastics and the RSI remain bullish signaling that sideways to higher prices in crude oil are possible near term. If February extends last week's rally, the reaction high crossing at 102.56 is the next upside target. If February renews the decline off November's high, the 50% retracement level of the October-November rally crossing at 89.46 is the next downside target.

First resistance is the reaction high crossing at 102.56. Second resistance is November's high crossing at 103.28. First support is the 38% retracement level of the October-November rally crossing at 92.73. Second support is the 50% retracement level of the October-November rally crossing at 89.46.

A Play on SCO This Week.....a Short Squeeze & Crude Oil Trade Idea

Tuesday, December 13, 2011

Crude Jumps On False Iran Rumor, But Holds Onto Gains

Crude oil futures leapt more than three percent in just minutes Tuesday on a market rumor that Iran closed a major oil shipping channel, but then pared gains as the rumor proved untrue.

According to the rumor, the Iranian government closed the Strait of Hormuz. The strait, located between Iran and Oman, is the most important oil shipping channel in the world, handling about 33% of all ocean borne traded oil, according to the U.S. Energy Information Administration.

The rumor was picked up on financial blogs and a handful of news web sites, and sent Nymex crude futures rocketing as high as 3.6% over Monday's settlement, to $101.25 a barrel.

An Iranian official later dismissed the rumor, and a spokeswoman for the U.S. Navy's 5th fleet in Bahrain said shipping traffic in the strait was flowing normally. The rumor appeared to be founded on a news item from Monday afternoon, in which a member of the Iranian parliament said its military was preparing to practice closing the straight......Read the entire Rigzone article.


How to Trade Using Market Sentiment & the Holiday Season

Wednesday, February 10, 2010

Crude Oil Rises as U.S. Targets Iranian Guard With Sanctions


Oil rose for a third day as the U.S. froze assets of four companies connected with Iran, heightening tensions with OPEC’s second largest crude producer. Futures increased as much as 1.7 percent as the Treasury Department announced the restrictions on the companies and one individual with links to Iran’s Islamic Revolutionary Guard Corps. The U.S. has accused the Guard of developing weapons of mass destruction and supporting terrorism.

“It’s an escalation, but we’ve been escalating in baby steps for a long time,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “What the Iranians are more worried about is the degree of unrest internally, which is not affected by these sanctions.” Crude oil for March delivery rose $1.05, or 1.4 percent, to $74.80 a barrel at 2:06 p.m. on New York Mercantile Exchange. Futures have lost 5.8 percent this year.

The U.S. has been trying to rally reluctant countries, especially China, to sanction Iran as the government in Tehran resists pressure to scale back its uranium enrichment work. Secretary of State Hillary Clinton has signaled the U.S. wants to target the Revolutionary Guard, an elite military branch with extensive business interests. Iran already is subject to United Nations Security Council restrictions, including a 2007 resolution freezing assets and banning travel for some Revolutionary Guard-affiliated companies and officials. The Iranian government maintains that its nuclear development work is a legitimate effort to build a civilian power industry.....


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Monday, November 23, 2009

Crude Oil Rises on Weaker Dollar, Iranian Military Exercise


Crude oil rose as a weaker dollar heightened the appeal of commodities to investors and an Iranian military exercise bolstered concern that Middle Eastern supplies may be disrupted. Oil climbed as much as 3.2 percent and gold reached a record as the greenback dropped on speculation the Federal Reserve will keep its stimulus measures in place and ensure interest rates remain at virtually zero. Iran is testing an air defense system this week, in a military exercise to assess the vulnerability of its nuclear plants.

“The primary reason for today’s move is that the dollar is in steady retreat,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “The drumbeat from Iran seems to also be giving prices a boost.” Crude oil for January delivery rose $1.64, or 2.1 percent, to $79.11 a barrel at 11:43 a.m. on the New York Mercantile Exchange. Prices are up 77 percent this year. The December contract expired on Nov. 20 at $76.72 a barrel. Oil traded between $74.79 and $82 the past five weeks after surging in early October.....Read the entire article.

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