Guest Post: Oil Hits 32-Month High As Unrest Persists In The Middle East

Tyler Durden's picture

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tawdzilla's picture

We're entering the right side of the peak oil bell curve.  The era of cheap oil is over.

samsara's picture

A really cute 2:00 video of The Peak Oil Curve and what it means.

JW n FL's picture

$125 Dec. ???

who wanted to deliver?? i forgot your dumb fucking name?

mayhem_korner's picture

We all like to gripe about greedy traders pushing up the price of oil. But at present, the most important oil-producing region in the world is grappling with fundamental changes, the results of which are almost impossible to predict. Uncertainty makes commodities more expensive.

Highly un-insightful.  Three rationales given - traders, fundamentals, and generalized uncertainty - but no commitment to any of them as a dominant gene.  My analysis (right or wrong, but fodder nonetheless):

Key underlying is that crude supply-demand complex is comparatively less variable than dollar supply-demand at present.  Fiat debasement is giving the commodity its direction.  Next, scarcity premiums are ascribed any time unrest in the ME reaches prime-time.  Unrest is always there, but it gets a market response when English-speaking westerners are getting camera time  in the midst of large gatherings of torch-bearing locals.  Traders don't push the market so much as give it temporal fuel as they play the "bigger-fool" game.

The compounding issue in this case is that the dollar debasement is also partly behind the civil unrest via food shortages in MENA.  We see the cancer at the gas pump, but it's much more real in the lives of those at ground zero.

Holodomor2012's picture


All sqawk is coverup.  The plebs must never awaken to the fact that monolithic usury predetermines monetary failure.  Were the plebs to (re)learn such a thing it would severly cripple the ability of TPTB to impose yet a new usurous currency after the previous one is destroyed by parasitism. 

CrashisOptimistic's picture

Price determined by agreement between buyer and seller . . . Of The Oil.  Not a piece of paper.

The classic KSA statement: We will not produce more when we have no orders for more.  Well, if they quote $200/barrel, they likely won't get orders and presto, they have their excuse to not produce, camouflaging yet again their inability to do so.

Oil is the alpha asset.  It trumps all else.  Oil isn't measured in dollars.  Dollars are measured in oil.

mayhem_korner's picture

If a finite resource is the "alpha asset", everything else should depreciate relative to it, and you should never offer to sell it to anyone for anything.  Just debase everything else by withholding.

The problem is you need currency to effect exchange.  If you collapse all the currency, you think oil will stand as the alpha asset?   

Maybe cut back a bit on the poppy seeds a bit, dude.

Charles Mackay's picture

Sorry, the loss of 1.3 mbpd of high quality Libyan oil can no more be 'priced in' the market any more than than the price of food on a desserted island can be priced in if there was only enough food for 9 to survive on an island of 10 people. 

What is the 'price' to pay when there isn't enough oil to go around.  I don't know but anyone who says for certain they know the price to put on a shortage is, well, a bigger fool than I for responding to this article.


mayhem_korner's picture

Shoot 1 of the 10 - problem solved.  Econs call this "demand destruction."

Seriously, if you can't survive without a whole lot less oil then you might as well mail it in right now.  Ain't gonna be your biggest problem.

JosephConrad's picture

The 2 U.S. trading borses are 'fixed, unregulated AND operate without a hint of integrity. Add to that the U.S. has sweetheart deals with all the Gulf states (we protect you & keep you folks in power & you give us sweetheart oil & gas pricing).

Then add to THAT the standard, ordinary White Racism, Arrogance, Greed & Self-aggrandizement

(RAGS) driving the U.S. & E.U. nations and you have regularly CHAOS in Resouces-Rich, Non-White nations and LOTS of DEAD MUSLIMS, Arabs and Africans! This adds up to SUPER HIGH Oil Prices Forever! GO NATO! 


That Peak Oil Guy's picture

Oil; the meth of industrial civilization.


ricksventures's picture

Oil; without it, you would be shitting in the woods, left without TP instead of reading and posting on ZeroHedge.....


The Meth is the idea of keeping the world overpopulated with too much cheap and donated medicine and food....The Meth is voting for enemies of the state that bow down to dick-tators instead of eliminating whatever stays in our way of getting the energy we need....The Meth is dumb taxpayers not knowing a thing about where their tax money go, not rebeling, not shooing, not protesting, just eating and sleeping, in that case its time for 20usd for a gallon to wake them fuck up, no food for you obese cow, no gas money, no truck driving , stay at home and starve, that gives you time to think about your past 100 years of sleeping....


BRING BRING the civil the world war, launch the A-bomb and either win and win for good or die you obese turd, let the dick-tators to sort out the world matters

westboundnup's picture

We'll sell no whine before it's time.

Urban Redneck's picture

... “There is little we can do in terms of price control,” said Mohammed bin Dhaen al-Hamli, the oil minister for the UAE. “The market should pay more attention to real supply rather than imagined shortages. International markets are choosing to ignore market fundamentals and bet on the worst-case scenarios.” ...

OPEC to English translation:  Price is irrelevant- we keep our jobs, or your imagined shortages will become very REAL.