Marcus Aurelius

Oil: A Slippery Slope Ahead?

In the timespan I limit it to?

Oil: A Slippery Slope Ahead?

Cameltrader, The book is called Red Storm Rising, Islamic terrorists blow up a crucial refinery in the USSR and The Bear decides war is the solution.

I too agree with you, geopolitical risk is not adequately priced into oil. I would think given a serious event in the Persian Gulf region we could see oil 2x in couple of weeks.

Oil: A Slippery Slope Ahead?

I think everyone here with a non-flat EEG reading understands world events will and can influence oil prices. If Iran or Israel act up that oil will move to the upside quickly. However, I am okay with holding these discussion factoring such events out. I don't think there is disagreement if something boils over in the Persian Gulf region oil prices will dramatically rise.

It has long been known Iran has been stockpiling crude oil (albeit mostly sour crude and in a time of historically high prices) for some time, I recall seeing such talk at this site and others. What is new now, is others are starting to do that in a more rational strategy to capture higher market prices (in a period of relatively low prices). However, that will probably slightly raise prices and then cause them to fall further when the tankers start to race each other to offloading points.

Right now, the sour economic mood is driving the oil market. Any OPEC cut to be announced is most likely already factored into pricing, and looking at the latest chart from the USEIA I see oil stocks are pushing the upper end of the average range, if you look, despite the rapidly dropping oil prices we see a large uptick in stocks. If the economy was humming that chart would look a lot different.