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Oil Breakout Alert - Kuwait, World's Fourth Largest Oil Exporter, Joins Demonstrations Demanding Regime Change
Crude dropped overnight, after the FT joined the BBC in the "False Rumor Spreading Korner", after the Libyan Investment Authority held newspaper said some OPEC members are looking to raise oil output to avoid any supply shortfalls. Too bad that just like every other previous rumor-based attempt to drive oil lower, this one was refuted within minutes by the same OPEC members that were allegedly boosting their capacity (which does not exist in the first place). Perhaps if the FT had read the note sent out at midnight by Goldman's David Greely, which noted that there is virtually no spare OPEC capacity left, they would have known why they should have come up with a more credible rumor: like Gaddafi committing suicide after watching the latest episode of Sheen's Korner. So much for the rumor mill. Now on to facts, where instead we see a new development which threatens to send oil surging far higher. Reuters reports that formerly peaceful Kuwait has just joined the ranks of demonstrators, demanding the resignation of the prime minister in a peaceful protest early in the day, with a larger one expected later in the day: "Kuwaitis demonstrating outside parliament for the prime minister's ouster came up with a new symbol of Arab discontent on Tuesday by handing out watermelons. "This is for the parliament's poor performance," one of the small band of protesters shouted as he gave a watermelon to a lawmaker making his way into the parliament. The significance was not spelled out, but in local parlance, a person who has a lack of understanding or holds an unrealistic point of view sometimes is called a watermelon. A potentially larger rally was expected later, inspired by spreading Arab protests that toppled leaders in Tunisia and Egypt before sparking the insurrection in Libya and spreading to other Gulf countries including Bahrain, Oman and Saudi Arabia." Kuwait, for those keeping track, is the 4th largest oil exporter in the world.
More:
In Kuwait, six members of the Kuwaiti youth group Kafi (Enough), gave watermelons to a few lawmakers as a signal of their political dissatisfaction in a country that has the most outspoken parliament in the Gulf Arab region.
The demonstration marked a tempered start to a planned day of unauthorised protests by youth groups demanding the removal of Prime Minister Sheikh Nasser al-Mohammad al-Sabah, a member of the ruling family, and greater political freedom.
Kuwait, the world's fourth largest oil exporter, does not allow political parties, and its parliament is made up of individuals who form loose blocs.
Demonstrations are banned in Kuwait without prior approval and youth groups Kafi and al-Soor al-Khames (Fifth Fence), the main organisers, will present a challenge to the government since they had not sought permission for the protests.
Some of the protest organisers not only want Sheikh Nasser to step down, but seek a replacement from outside the al-Sabah family, which has ruled Kuwait for some 250 years.
The prime minister, a nephew of the ruler, has survived two non-cooperation motions in parliament since he was appointed in 2006. All other critical portfolios, such as defence, interior and foreign affairs, are held by al-Sabahs. The emir has the final say in all political matters.
Tension with stateless Arabs, longtime residents of Kuwait known as "bedoun" who clashed with police last month in protests demanding citizenship, appeared to be easing after some lawmakers promised to discuss a draft law in parliament on Tuesday that would grant them basic civil rights.
Perhaps SocGen should redo their scenario analysis to account for what increasingly seems to be the endgame: a complete shutdown of the MENA oil output as the region moves through a revolutionary phase inspired exclusively by Bernanke's liberation efforts. In the meantime, we suggest all readers should go long Vespa, or whatever private equity company LBOed Vespa.
As for why last night's attempt to spread a rumor about another "excess capacity" boost is likely the last one, we suggest readers skim the latest note by Goldman's David Greely:
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TYLER and Staff / We always admire, and appreciate your hard work, and consistant reporting (especially on a timely basis) on important news of the day. We know it takes tremendous work. There are folks out there who applaud your dedication. Keep up the good work.
Agreed.
The best way to support Zerohedge is to donate. However, I think Tyler needs to upgrade the payment system. As far as I know, not everybody on this planet can donate to Zerohedge. People from countries like China cannot donate money to Zerohedge because Paypal doesn't process their orders.
paypal sucks
I think Tyler can provide a mailing address so that people can use postal service to send money to Zerohedge if Paypal doesn't process their orders.
Just send it to Sprott Asset Management in Toronto. I'm sure Tyler has some sort of direct deposit setup with them.
Donations in Yuan might soon become more valuable than dollars, so TD would do well to find a way of accepting donations from China. If our government can accept support from China, so can TD!
+10
Respect to all of you ZH guys!
Agreed. I even click on the links every now and again. Especially when I see a TBTF show up. Makes me feel all warm and fuzzy knowing that the Squid or Morgue pays for their own demise.
No need to panic, worry or take your mind off of work, the radio or your television.
Ben "Phantasm 666" Bernanke is 100% positive that oil prices will not affect the
robust economic recovery. Jobs will be back to full strength by 2029. And a Unicorn will
be arriving at your door in less than 30 minutes to give you a hummer*. (Choose Oral Sex
or Vehicle. You can't have both.)
Is "oral sex" by a unicorn a euphamism for unicorn horn anal rape?
"Getting Bernanke'd" = Getting raped while starving to death.
"Getting Barney Frank Bernanke'd" = Getting raped while starving to death
inside your underwater house while it's on fire.
+1 well said.
not good
i feel a racist joke coming with the whole watermellon thing,but i'll leave that to the next guy
handing obama watermellon and fried chicken comes to mind.....
please... tell the joke :)
you make me curious :)
Obama graduated from fried chicken and watermelon in 2008.
He's now dining on elitist specialties like middle class taxpayers and retired pensioners. Bernanke prepares his dishes.
Down Under those of the "Green" political persuasion are commonly referred to as watermelons. Green on the outside. Red on the inside.
http://www.doubletongued.org/index.php/dictionary/watermelon/
Watermellon: "Green" on the outside, "Red" on the inside.
ha... ha... American humor?...
YOU GUYS REALLY NEED TO WORK ON THAT ONE!!
It's like watching a seinfeld show! You don't know what to do: switch the channel or cry!
Blasphemy!
SD: might have just a skosh too much subtlety for ya. ;-)
- Ned
{but I still love your avatar}
Just couldn't resist, eh?
Think we need those Ju's to start making it snow over there.
Everyone's favorite Marc Faber is long oil...and PMs, AG and RE.
Bullish on EnergyMarc Faber, Editor & Publisher of The Gloom, Boom & Doom Report discusses why he is bullish on energy in the long term.
http://www.cnbc.com/id/15840232/?video=1832818418&play=1
Bloomberg: experts say, oil and gold spikes can't last.
experts, mind you tyler, experts in the field of experting. guess silver isn't in a spike.
bitchez†
X is an unknown quantity. Spurt is a drip under pressure. So experts must be...
It's for America to get rid of our regime - Obamonster(and his czars) and Bernankenstein.
Oh you poor man...you may want to get a sock or something to stuff in those.
Per the great Hibah Yousuf at CNN today, the "Oil and Gold Rally Won't Last."
http://money.cnn.com/2011/03/07/markets/commodities_oil_gold_predictions/index.htm?source=cnn_bin&hpt=Sbin
Of course, if you dig into Ms Yousuf's LinkedIn page you'll see that she graduated in 2009 with a journalism degree, and has worked 6 internships at places like Muslim Girl Magazine and NPR. That apparently qualifies her to be a reporter for CNNMoney.com.
NEW YORK (CNNMoney) -- Oil above $100! Gold hitting new records! Don't fear the headlines. Most market experts think oil and gold prices will settle down as the unrest in North Africa and the Middle East region subsides.
Ok that was a good morning laugh. Like this is just some transient thing that will just fade away like the housemates from a big brother show.
The real nugget was at the end:
"Consumers in Asia" - are there many of those? And I'm sad to hear that they're suffering inflation over there. Better there than here I suppose, but still unfortunate.
Poor Azians with their inflation issues....
In fact, my wife is in China. And I can attest to extreme inflation over there for the last year. It has put a real hamper on things. And I can also attest to extreme difficulty in aquiring silver in the retail market there. Gold isn't so hard to get ahold of, but silver is practically nonexistent, and has been for the last two months. Something strange is brewing there with regard to PMs. While I can get silver by the bucketload here in London still, despite all the press surrounding shortages, there is none to be had for retail in the center of the world.
Sounds like an arbitrage opportunity to me.
It would definitely be, if I didn't have a 20% VAT on silver + premiums + disturbing spreads to pay in London. People in the states who travel to China regularly are probably better able to realize the arb opportunity than I can.
My Mother-in-Law told my wife people in Shenzhen are crossing over to Hong Kong to buy soy sauce!
Perhaps William Banzai can confirm.
That is funny. What's even funnier is that most of the people in the survey link that did change their mind on gold have INCREASED their projections from the last survey and most of the projections are at a higher POG than at present. http://money.cnn.com/markets/storysupplement/investment_strategists/?iid=EL
Anyone have a standing photo of Ms Yousuf?
Oh and just in time for the premarket smashdown. All those chumps still short are gonna be in a world of hurt soon if this pans out.
actually no.
Oil up = less purchasing power = less corporate "profits"
I was going to also say less tax revenue but those big companies that got bailed out won't pay any taxes for the next 20 years as they can write off their taxes on the bailout money they "refunded".
I'm confused by this. Did you reply to the comment you thought you replied to?
You might want to clarify in exactly which securities the aforementioned chumps are short.
what I mean is this:
The market will take a serious dip if oil stays high like this.
Never have petrol prices been so high here in Europe for example. This is not only because of higher oil prices but because governments tax the petrol prices to smoothen their deficits.
Normally we have what we call a “clicket” system which lowers the taxes if oil goes up to much. This system has been cancelled.
At this rate, is oil hits 200 dollars a barrel, we’ll be looking at 4 euro per liter. = 21$ per gallon
These prices are now already starting to cripple the transport sector very noticeable these last few days. It’s just not profitable anymore to ride out for them with fixed prixes when oil is so high. Expect DHL and UPS to really take a hit here in Europe as they also have negotiated prices with their customers.
1.637 euro /Liter
=
8.632 dollar / gallon
(1 gallon = 3,78541178 liter )
First transportation and logistics will crash followed by retail....
The economy can only prosper when oil is cheap = FACT.
I'm in London. They do the same dirty shit here too. There's no doubt that this oil shock will lead to recession and almost certainly recessionary collapse of oil prices in the interim. The only question is what levels the peak and trough will be. Its clear the loser in all this is the living working class. But I doubt TPTB give a flying fuck. They probably want us all dead or working their corporate farms anyway.
Potential Gold/Silver targets based on $200 oil and previous ratios being repeated:
http://www.bullionbaron.com/2011/03/goldoil-and-silveroil-ratios-then-an...
Link: http://www.bullionbaron.com/2011/03/goldoil-and-silveroil-ratios-then-an...
And this. Cramer calls for 1,000 pt DOW rally when Gadf goes.
2 years ago, I actually watched that moron's show.
Just don't listen to it and don't read his stuff or you'll get bankrupt.
1000 call for Cramer to go regardless of what the DOW or Col Wake'n'Bake do.
Col Wake'n'Bake.. Lol.. He does look like quite the stoner.
There's little doubt that Q'Daffy smokes more weed and hash than a gaggle of Cypress Hill fans...it's a bedouin thing (yeah, you thought those tents were protection from the sun).
They raise their 'forecast' for 2Q11 to 105 for Brent while it is at 115 right now. Hmmmmm, brilliant prediction. Considering current events I find that 'forecast' pretty bearish.
Unleaded: $3.89/gal
Premium: $4.09/gal
So according to the bears, Marc Faber club, we now have a choice between WW3 and grand deflation. Which will it be? In the meantime its probably QE-3 and grand inflation, until we go over the cliff. I think Obama will permanently locate to Hawai bunker and leave Washington to those who go down in flames and get all the blame when Wall Street implodes.
To be concise, a choice between war 'here' or 'over there'.
You snowballing the roller coaster of an all american super bowl type event where 'people' play 'elites' in a no holds barred fight club? ZH as quarterback...on grass roots USA squad?
I'll play defense for the 'roots'; middle linebacker, if only for the chance to sack an 'elite' QB or helmet-to-helmet their WR.
Too bad the RE market in Hawaii is screwed:
Hawaii ponders moratorium on home foreclosures"So many Hawaii residents are losing their homes that lawmakers are threatening a five-month foreclosure moratorium to buy time for homeowners to get back on their feet."
http://www.hawaiinewsnow.com/Global/story.asp?S=14193234
Tyler: I know how hard you work to provide ZH community with breaking news and spot on analysis. More important your outting of government deception is making me think that it's time to take ZH to the next level...:-)
You proposing TD to run for presidential spot in 2012?
I think he means make the site 3D.
Wow, I'll have to buy special glasses!
Oups, forget this one!
Banzai can create the birth certificate. He did an excellent job creating Obama's...
oil, thinking it will see short term highs of 122ish, then correction to 90ish level: http://www.hedgefundlive.com/blog/crude-oil-rally-which-sectors-to-buy-and-stay-away-from
Is that a Tell?..short oil?...lol
I'm curious why the goldman report is long gold, platinum, and copper, but not silver.
Sorry can't talk have a fuckload of watermelons to hand out....
"Kuwaitis demonstrating outside parliament...came up with a new symbol of Arab discontent on Tuesday by handing out watermelons. "
Americans demonstrating outside Congress could use lemons.
water melons are a sexual symbol. It implies that over-ripe bubbles are like bubble gum, they tend to go pop. It's a warning to the rulers to watch their nuts as there is much street chatter of nut crackers. Swing low, swing slow, and don't go for a blow job when you can walk on to slippery snow or oily slick of goo. Walk on the wild side and you find yourself in Benghazi of Muscat. Omanous sign of the times.
beware its roll over time for next few days in oil futures. going long in the wrong contract or April contracts could be costly .
USD will not collapse.
There is only one scenario: relatively strong USD and punctuated supply and extraction investment disruptions continuing at least till the end of 2014, when oil will be 200 USD on average. This leads to steady upgoing oil price curve, with a little ( to Brent 130-145) drop after Q1 2012 when the USA will be in recession again. But this time, due to supply disruptions in all oil producing countries due to political instability, oil prices will NOT fall with 2012 -2013 recession in the USA ( and probably elsewhere) :
http://saposjoint.net/Forum/viewtopic.php?f=14&t=2626&start=0
http://saposjoint.net/Forum/download/file.php?id=2608
http://saposjoint.net/Forum/download/file.php?id=2609
Graphs were made on February 6th taking into account typical de cooperation patterns after too much cooperation (globalisation, cheap credit, herding) caused sharp crisis ( Lehman-March 2009) and its effect on oil prices. Once oil started to grow with revolutions all over the place, further developments became clear, and mappable.
De cooperation as natural reaction to too much cooperation that lead to the boom and bust will ensure countries and companies will start to play zero sum game, leading to short term outlook and practical solution dominance over world wide Utopian schemes. And leading to conflicts as ultimate de cooperation.
The logical thing is , that USA will be forced to return to fiscal prudence before it will run up real inflation by rising oil prices which renders all extra spending senseless as added value moves to oil producers and fiscal deficits and FED actions threatens Greek style 10% interest rate on Treasury bills, which , in turn, means 1,4 trillion USD to service debt alone.
And sharp return to fiscal prudence after current record deficits (February 2011-all time record =223 billion USD in 1 month) means relatively strong USD and recession again.
dream on...was a nice tv series...
It's a bit cynical, but you might be right: use QE to goose the economy a bit and export some chaos abroad. Once that has done its work, cut the QE, turn inward with a vicious austerity program, and try the blame the people for the budget shorfalls. If there's a new recession, you say it's because of excessive social spending, collective bargaining rights, etc. "We fixed the old recession thanks to the brilliance of Wall Street. Just look at the S&P! See how much it rose! Now gimme your pension!"
If this is what they're doing, they're counting on the public having the collective memory of a gnat, and staying pacified. But remember that these people are dealing from a neoconservative playbook, and the cornerstone of the neoconservative ideology is that people are completely stupid and must be lied to at all times.
"Ralf Norrman and Jon Haarberg (1980) explore the semiotic role of cucurbits in Western literature and culture and extend this analysis to selected non-Western cultural contexts. Focusing on melons, watermelons, and cucumbers (as well as other domesticated cucurbits), these authors note that cucurbits generally have deep, profound, and complex multivocal symbolic associations with sex and sexuality, fertility, vitality, moisture, abundance, opulence, luxury, gluttony, creative power, rapid growth, and sudden death. More specifically, they note that melons are highly associated with status in colder climate European societies because historically they were "seasonal, expensive and scarce, with all the symbolic development that a commodity with such characteristics usually goes through" (Norrman and Haarberg 1980: 16). Cucurbits also appear frequently in non-Western cosmologies, for example, "in Burmese and Laotian mythology, the creation of man started from a cucurbit" (Norrman and Haarberg 1980: 26). As with other key symbols marked by binary oppositions, symbolic meanings attached to cucurbits can also be employed to convey a broad variety of negative symbolic associations along race, class, and gender lines."
http://www.cambridge.org/us/books/kiple/cucumbers.htm
If that was not a "cut and paste", I am very impressed, otherwise, it is clear that you have too much time on your hands :)
La cucurabita, la cucurabita...what a melody to play to a ripe watermelon senhorita in her hacienda.
http://www.youtube.com/watch?v=dsx2vdn7gpY
"in local parlance, a person who has a lack of understanding or holds an unrealistic point of view sometimes is called a watermelon" As in 'junk'.
A new perjorative for junk-writing trolls has entered the ZH lexicon. Watermelonz, bitchez.
With all the demonstrations and calls for new regimes in so many of the OPEC countries, will this potentially lead to their break-up, and if so, will it lead to cutthroat competition and a possible crash in the price of crude? Just wondering. And, like the weather, just wait till tomorrow and I can provide a 100% accurate forecast of yesterday's weather!
Kuwait? Demonstrating?
Wait a minute, didn't the US liberate them in 1991?
So, the very babies they saved from the "incubators of death" are now rising up.
Funny how that all works.
Actually as oil assets get transferred from dictatorships to Socialist governments the prospect of boycotts, cutoffs and cartels goes down, not up.
When the dictators ran the show they could afford to turn off the spicots and drive prices up, when the Socialist mob runs to valves they wont turn off the flow for anything, any loss in oil flow results in an immediate power shift and loss of income and benefits (free food, free healthcare, free rent).
Take Northern Iraq/Kurdistan for an example, now that those oil assets have been transferred from Saddam to the Kurd mob they wont turn off the flow until the reservoir is empty.