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http://www.cnbc.com/id/45857310Iran Oil Tension Boosts Prices: The New Libya?
Oil prices surged nearly $4 per barrel on Tuesday morning on concerns about supply disruption ensuing from a possible confrontation between the U.S. and Iran. Front month WTI crude prices reached a intraday high of nearly $103 a barrel. Technically, February WTI crude futures need to breakout past the most recent high of $103.37 for a drive to $104 and higher.
Brent crude oil prices remain in an upswing as well, hitting a session high of $111.58 per barrel, and a close above $109.59 signals an emerging bull run advance, according to technicians. For Brent crude, the next key level to watch is $112.70, the 200-day moving average.
Traders say Iran is the new Libya. Just as civil war in Libya caused crude oil prices to spike to near $115 a barrel in 2011, escalating tensions between the Iran and the West could cause oil prices to reach those levels again early this year. Iran is the world's fourth largest oil producer, with production at 4.245 million barrels daily in 2010, according to the 2011 BP Statistical Review.
Earlier on Tuesday, Iran's army chief warned the U.S. Navy not to return an aircraft carrier back to the Persian Gulf after it was removed due to Iran's naval exercises in the area. Iran's threat comes after it test fired missiles in the Strait of Hormuz over the weekend and the U.S. formalized extending sanctions on any entity dealing with the Iranian Central Bank. The euro-zone nations should decide by the end of the month whether to place an embargo on Iranian oil imports.
"Some of the rhetoric can at times be part of a PR show but it can quickly spin out of control," said Petromatrix energy analyst Olivier Jakob. "Iran asking a departing U.S. aircraft carrier not to return is almost forcing the US Navy to send it back to the Persian Gulf."
Iran has said it could shut the Strait of Hormuz, a major waterway that the EIA calls "the world's most important oil chokepoint due to its daily oil flow of almost 17 million barrels in 2011."
Iran's currency is already feeling the pinch of a possible oil ban — with the rial falling 40 percent vs. the dollar in the past month.
"In this environment of increasing tensions and rhetoric, global asset managers are unlikely to give up their long exposure to oil ... at least until we can have a clearer idea as to what the Eurozone decides on an Iranian import ban and the Iranian reaction to the Eurozone decision," Jakob said.
He recommended buying the very back of the curve in Brent crude oil, buying December 2016 Brent at $90 in the current Iranian geopolitical environment.
Some traders said they're hedging Iranian risk to oil prices by buying "out of the money" calls. Call options from $110 to $130 have been trading, said Paramount Options president Ray Carbone, on concerns about Iran as well as possible strikes in Nigeria.
Jesus, wtf just happened to oil and gold?
EDIT: Crude Surges On News Europe Agrees To Ban Iran Oil Imports
http://www.zerohedge.com/news/crude-surges-news-europe-agrees-ban-iran-oil-imports
IDIOTS, China is gonna buy it all. European consumers are going to pay more at the pump.
http://www.presstv.ir/detail/219268.htmlChina rejects US-led sanctions on Iran
http://www.presstv.ir/detail/219297.htmlS. Korea disregards US oil sanctions
War drums..
Ok. I've been long oil since 10-11-2011 when WTI was at $ 77.5 (now: $ 109).
It's time to put tight stops in.
Crude is technically overbought, the dollar is oversold, the Iran story is overhyped, the US is considering to release some oil out of the national reserves, and Saudi Arabia is increasing supply, everybody is screaming about high gas prices. Prepare for a pullback before this rally continues. I think the same applies to pms.
I've followed this story in more detail at Ron Paul Forums:
http://www.ronpaulforums.com/showth...et-to-soar-on-the-developing-IRAN-story/page8
http://www.presstv.ir/detail/2012/07/08/249976/china-to-invest-usd-20-bn-in-iran-oil-fields/China to invest USD 20bn to develop two Iranian oil fields: Qasemi
Iran's Oil Minister Rostam Qasemi says China has agreed to invest USD20 billion in developing north and south Azadegan and Yadavaran oil fields which will finally produce 700,000 barrels per day (bpd) of crude oil.
Speaking to reporters in a visit to the Petropars Company on Sunday, the oil minister said the agreement for developing Azadegan and Yadavaran oil fields has been reached after 10-15 years of negotiations with the Chinese side. He added that the Chinese side has started its activities by investing USD20 billion dollars in the oil fields.
“So far more than 20 drilling rigs have been installed in Azadegan and Yadavaran oil fields and plans have been made for the daily production of 700,000 bpd of crude oil [when development of both fields is complete],” Qasemi stated.
The minister said contracts have been signed for the development of 12 new oil fields in the past few months, adding, “Development of some fields, including Azar and Changouleh oil fields has also begun.”
Qasemi said necessary measures have been taken for the development of Darkhoein and Mansouri onshore oil fields as well as offshore fields such as Farzad A.
Yadavaran oil field is located in the southwestern Khuzestan Province bordering Iraq. The development project of the oil field is expected to be implemented in three phases. Upon the completion of all phases, some 300,000 barrels of oil are expected to be pumped out on a daily basis.
Azadegan oil field has one of the world’s largest oil deposits, with in-place oil reserves estimated at 42 billion barrels.
Iran holds the world's third-largest proven oil reserves and the second-largest natural gas reserves.
The country's total in-place oil reserves have been estimated at more than 560 billion barrels, with about 140 billion barrels of extractable oil. Moreover, heavy and extra heavy varieties of crude oil account for roughly 70-100 billion barrels of the total reserves.
http://in.reuters.com/article/2012/12/25/iran-military-idINDEE8BO03A20121225Iran will begin six days of naval drills in the Strait of Hormuz at the end of this week, an Iranian naval commander said on Tuesday, an exercise meant to showcase its military capabilities in what is a vital oil and gas shipping route.
The "Velayat 91" drills will be held from Friday to Wednesday across an area of about 1 million square kilometres in the Strait of Hormuz, the Gulf of Oman and northern parts of the Indian Ocean, said Habibollah Sayyari, according to Iranian media.
Iranian officials have often said that Iran could block the strait - through which 40 percent of the world's sea-borne oil exports pass - if it came under military attack over its disputed nuclear programme.
Sayyari was quoted as saying the new drill would test the navy's missile systems, combat ships, submarines and patrol and reconnaissance methods.
"In this exercise we will use the navy's newest weapons and tactics," Sayyari said. "Certainly we will observe the marine borders of neighbouring states and will carry out our exercises according to international laws and regulations."
A heavy Western naval presence in the Gulf is meant to deter any attempt to block the waterway.
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