Are You Ready For The Biggest One-day Rise In The Oil Price EVER?
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Are You Ready For The Biggest One-day Rise In The Oil Price EVER?
Date
11/07/2008
Smart Commodities UK
| By Garry White
If Iran is bombed, it will happen in December… and all bets for the oil price will be off…
If the US or Israel bombs Iran, all bets regarding the oil price will be off.
Just the threat of an attack sent the oil price soaring overnight. All futures contracts are now above $140. Any further sabre rattling over the weekend could propel the oil price to another all-time high.
The Iran issue is not going to go away… it will support the oil price to the end of this year. These fears are very real because any attack on Iran could cripple its output and catalyse an economically catastrophic oil shock. The country is Opec’s second-largest crude oil producer after Saudi Arabia, with a daily output of around 4m barrels. Losing this would be a substantial bite out of current production of 85m barrels per day and other Opec nations would be unable to make up this shortfall.
That’s why you should keep all of your oil plays in your portfolio. The oil price is unlikely to slump while Dick Cheney is being driven around Washington in his motorcade.
A hawk with an itch
It is also no secret that the Vice President wants to bomb Iran… and he’s sitting in the last chance saloon.
According to fellow hawk and former UN Ambassador John Bolton, the most likely time for an attack on Iran will be after the Presidential elections in November, but before the inauguration of the next President in January. I think his assessment is correct. Republicans will not want military action to interfere with the Presidential campaign and the hawks will want an attack before the new President takes up his office.
Bolton does not think that any attack on Iran will have consequences… he is wrong.
He argues that that Iran’s options to retaliate after being attacked were “less broad than people think.”
Bolton reckons that Iran would not want to escalate any conflict because it still needs to export oil and it would worry about an even greater response from Israel and the US. Bolton also thinks that Arabic nation will support this military endeavour.
There are also concerns over a unilateral attack on the country by Israel. The Israeli army have been playing war games with Greece over the past few weeks, ratcheting up the tension. However, I do not expect Israel will take any action without the approval of the US.
Whether an attack happens or not (and I hope it does not because of the global economic consequences) fears of an attack will keep the oil price high. To discover the best ways to profit for the buoyant oil price click here
Regards,
Garry White
Editor
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Registered office 7th Floor, Sea Containers House, Upper Ground, London SE1 9JD. Registered in England with Co. No. 1937374. VAT No GB629 7287 94
Fleet Street Publications is authorised and regulated by the Financial Services Authority Reg No. 115234. www.fsa.gov.uk/register