Oil Breakout Alert - Kuwait, World's Fourth Largest Oil Exporter, Joins Demonstrations Demanding Regime Change

Tyler Durden's picture

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.


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:


Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
AR's picture

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. 

eigenvalue's picture

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.

eigenvalue's picture

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.

Mark McGoldrick's picture

Just send it to Sprott Asset Management in Toronto.  I'm sure Tyler has some sort of direct deposit setup with them.



metastar's picture

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!

Sudden Debt's picture


Respect to all of you ZH guys!

malikai's picture

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.

NewThor's picture

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.)



malikai's picture

Is "oral sex" by a unicorn a euphamism for unicorn horn anal rape?

NewThor's picture

"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.


johnQpublic's picture

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.....

Sudden Debt's picture

please... tell the joke :)

you make me curious :)

Twindrives's picture

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.   

Peace is the x-axis's picture

Down Under those of the "Green" political persuasion are commonly referred to as watermelons. Green on the outside. Red on the inside.


New_Meat's picture

Watermellon: "Green" on the outside, "Red" on the inside.

Sudden Debt's picture

ha... ha... American humor?...



It's like watching a seinfeld show! You don't know what to do: switch the channel or cry!

New_Meat's picture

SD: might have just a skosh too much subtlety for ya. ;-)

- Ned

{but I still love your avatar}

gordengeko's picture

Think we need those Ju's to start making it snow over there.

Temporalist's picture

Everyone's favorite Marc Faber is long oil...and PMs, AG and RE.

Bullish on Energy

Marc Faber, Editor & Publisher of The Gloom, Boom & Doom Report discusses why he is bullish on energy in the long term.


velobabe's picture

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.


snowball777's picture

X is an unknown quantity. Spurt is a drip under pressure. So experts must be...

shushup's picture

It's for America to get rid of our regime - Obamonster(and his czars) and Bernankenstein.

snowball777's picture

Oh you poor man...you may want to get a sock or something to stuff in those.

Gene Parmesan's picture

Per the great Hibah Yousuf at CNN today, the "Oil and Gold Rally Won't Last."


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.

malikai's picture

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.

Gene Parmesan's picture

The real nugget was at the end:

The handful of experts who did raise their forecasts for gold cited increased buying by consumers in Asia and the Chinese central bank, which is battling against increasing inflation in the country.

"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.


Sudden Debt's picture

Poor Azians with their inflation issues....



malikai's picture

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.

SilverRhino's picture

Sounds like an arbitrage opportunity to me.

malikai's picture

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.

Saxxon's picture

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.

Temporalist's picture

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

Snidley Whipsnae's picture

Anyone have a standing photo of Ms Yousuf?

malikai's picture

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.

Sudden Debt's picture

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".

malikai's picture

I'm confused by this. Did you reply to the comment you thought you replied to?

snowball777's picture

You might want to clarify in exactly which securities the aforementioned chumps are short.

Sudden Debt's picture

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.

malikai's picture

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. 

bullionbaron's picture

Potential Gold/Silver targets based on $200 oil and previous ratios being repeated:


max2205's picture

And this. Cramer calls for 1,000 pt DOW rally when Gadf goes.

Sudden Debt's picture

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.

snowball777's picture

1000 call for Cramer to go regardless of what the DOW or Col Wake'n'Bake do.

malikai's picture

Col Wake'n'Bake.. Lol.. He does look like quite the stoner.