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$20 Oil Looms As Iran-Nuclear Deal Nears Deadline

Tyler Durden's picture




 

As the deadline for Iran nuclear talks looms, the possibility of a deal which in some way lifts crude export sanctions is starting to be realized. As we warned 2 weeks ago, despite all the rhetoric, a confluence of political factors makes a deal highly likely at this point; and as The Telegraph reports, Iran is a sleeping oil giant holding 9% of the world’s proven oil reserves and with an estimated 2m barrels per day of excess supply already sloshing around international markets, any significant increase in Iranian output could easily trigger a further rout in prices. While OPEC may well clamp down on this in June, as The Telegraph concludes, by then a barrel of oil may already be selling for $20.

Crude rejects Yemen premium and starts pricing in the supply from an Iran deal...

 

As we explained previously, a confluence of political factors makes a deal highly likely at this point however.

Firstly, the USA has a stated policy of pivoting from the Middle East and Europe toward Asia. There are a number of reasons for this, but the major one is that the rebalancing of China is likely to be a fraught affair and nobody can forsee the outcome. As such, the USA would prefer a balance of power stabilising the Middle East, of which Iran and Iraq form an important part.

 

Second, a number of traditional Middle Eastern alliances such as have been frayed in recent years due to certain conflicts and clashes on a leadership basis. This is not to say that Iran, who are leading the fight against ISIS, are a prospective ally, but they may no longer be part of a defined Axis of Terror.

 

Third, President Obama is a final term President looking for some final wins. The recent letter from 47 letters in which they claimed to have the power to rewind any Iran deal ironically highlighted his ability to push through a deal if he chose on the response, with a range of parties, from Iranian lead negotiator Zarif to US government officials pointing out that any agreement would be bilateral and binding and that Obama has the power to put this in place. This has been our view for some time as the persistence of multilateral agreements, particularly those likely endorsed by the UN security council is huge, with sanctions also only working if one has assistance from a wide range of parties. Any future US leader could theoretically renege on the agreement, but this is something almost unprecedented and with minimal upside given the agreement will have clauses in case Iran steps out of line.

 

Fourth, the interim deal extensions which have rolled back Iran's nuclear breakout capability (they had lots of 20% enriched Uranium, which has now been converted to 5%, which takes longer to build a bomb from) have an initial end point at the 28th March for a preliminary deal (to be finalized end of June), with, from our sources, the technical details having already been worked out last year of how monitoring etc would work, but the political side not quite there. The Iranian new year celebrations of Nowruz start on the 21st March, putting pressure on the Iranian side to get a deal done by the 20th as the period after this is one where reaction locally will be minimal and it is generally difficult to get anything done for a while. The P5 + 1 parties are scheduled to start their latest talks on the 15th.

 

Fifth, the Iranian government has changed to a more moderate Rouhani from the more populist Ahmedinejad and the Iranian economy has stabilised dramatically, something likely to continue as they increase their influence in Iraq. It is notable that there are more American educated PhDs in the Iranian cabinet than the whole of Senate and Congress.

 

Finally, sanctions are already breaking apart on Iran as Russia has been pushed out in the cold due to what I believe is the true Clash of Civilizations. There have been numerous moves for increased co-operation between the two countries as part of Russia's push to increase its soft power in the Middle East as it fills the gap left by the departing USA and Russia is also set to sell Iran Antey-2500 anti-aircraft missiles, an upgrade on the already agreed S300 system. This is an interesting system as it offers anti-ballistic missile protection as well as anti-aircraft protection, effectively hardening Iranian nuclear sites against Israeli attack (the US could still overwhelm it)

So, with these factors it seems we are heading to a deal perhaps next week, or if not in June of this year when the interim deal officially subsides. After June given the political environment in the US and likely developments in Iran, it will become considerably more difficult.

And now, as The Telegraph reports, the deadline is looming and oil prices are starting to reflect the possibility...

In terms of commodities, the biggest impact that a resumption of normal economic relations with Iran will open up is in the oil industry. Tehran is a sleeping oil giant, which has been frozen out of international markets and denied access to key technology and investment that could lead to a massive surge in its potential to produce oil and gas. The country holds 9pc of the world’s proven oil reserves and a nuclear deal that could open up its fields to foreign investment is potentially game changing for the industry.

 

With oil prices continuing to come under pressure from an estimated 2m barrels per day of excess supply sloshing around international markets, any significant increase in Iranian output could easily trigger a further rout in prices. The price of a barrel of crude has fallen 50pc since last June to trade around $50 per barrel but and agreement in Lausanne to restore Iran back into the international community could easily trigger a further sell down towards levels around $20 per barrel.

 

 

Ahead of the Lausanne talks, Iran’s oil minister Bijan Namdar Zangeneh said that the country could easily increase production by 1m barrels per day (bpd) within months of sanctions being lifted. Under the current terms of the economic sanctions designed to bring Tehran to the table the country’s oil exports are restricted.

 

“In case the international sanctions against Iran are lifted, 1m barrels a day will be added to the country’s crude-oil production and exports in several months,” Mr Zanganeh has said in recent weeks.

 

...

 

One significant barrier to a major increase in Iran’s oil output could be its membership of the Organisation of Petroleum Exporting Countries (Opec). The 12-member cartel, which controls a third of the world’s oil supply, maintains a quota system that Tehran would have to negotiate. It’s unlikely that Saudi Arabia would be willing to support any increase in Iranian exports, which sets up a tense meeting of the group’s ministers when it next meets in Vienna in June. By then a barrel of oil may already be selling for $20.
 

*  *  *

Which leaves us wondering... just what outcome does Obama want? A 'deal' saves face internationally but crushes the doemstic shale industry and implicitly the US economy... or 'no deal' which might force a wider proxy war spread to Russia (good for US military spending), make Israel happy-ish, but raise the threat potential in the middle east and the potential for more US-ally-deserters to start acepting Iran crude no matter what...

 

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Mon, 03/30/2015 - 09:26 | 5941477 thegazzman
thegazzman's picture

the world needs negative oil prices to spur growth

Mon, 03/30/2015 - 09:30 | 5941487 Headbanger
Headbanger's picture

Negative gravity too!

Mon, 03/30/2015 - 09:40 | 5941534 NotApplicable
NotApplicable's picture

Negative available storage space should be a real hoot.

Mon, 03/30/2015 - 09:52 | 5941583 FreeShitter
FreeShitter's picture

Negative gray matter.

Mon, 03/30/2015 - 10:38 | 5941807 NidStyles
NidStyles's picture

The world needs Negative Government Growth for a few decades to spur economic growth and prosperity. Anything less is a pathway to idiocy and pointless wars.

Mon, 03/30/2015 - 09:41 | 5941537 pods
pods's picture

Cue Bibi with another cartoon bomb pic.

Iran is still only 2 years away from getting the bomb.  Have been for the last 2 decades.

pods

Mon, 03/30/2015 - 10:02 | 5941621 negative rates
negative rates's picture

That's what happens when you have a short memory.

Mon, 03/30/2015 - 10:03 | 5941626 Oldwood
Oldwood's picture

Well, if this deal goes through, maybe all your dreams will come true.

Iran needs nuclear power as much as I need a second dick. 9% of world oil reserves and they need nuclear power for peaceful purposes? You may think it only fair that they have nukes too, but even in a fair fight, no one wins in a nuclear war, especially in the ME.

And given we have had all types of sanctions on Iran for the last thirty years, maybe, just maybe, that is the reason they still don't have a bomb?

Mon, 03/30/2015 - 10:32 | 5941781 greyghost
greyghost's picture

maybe after thirty years Iran could have begged, borrowed, stolen or smuggled the items need to make said bomb? just asking. surely during the ninties they could have found some errant sole in russia or ex-soviet state to sell them one? hell, for all you or I know they may already have 4 or 5.

Mon, 03/30/2015 - 11:22 | 5941976 Oldwood
Oldwood's picture

So sanctions have had no effect? So why are the Iranians negotiating to eliminate them? And why does Iran need nuclear power? And is it good enough reason to defy virtually every other nation? This is not just about America. Ask France. No one knows what the outcome of a Iranian Nuke will be but virtually everyone is coming out of the wood works demanding nuclear weapon capacity since Obama decided to release Israel's nuke info...while still concealing all other nation's specifics. Anyone with a brain can see this is about destabilization. The ME was a mess under Bush but look at it now. Do you think this is an accident? Do you think we are seeing the creation of a multi nation Muslim military because peace is in the air? America has done a lot of stupid evil things that should earn us a great deal of disgust and disrespect, but it has never been worse than it is now. We find ourselves in a bad place with a government hell bent on making it worse still.

Maybe these idiots believe they somehow will put America back on top by inciting a world war that will destroy our competition, much as WWII did, but I think that is a dumb, stupid and incredibly evil strategy....and Obama is leading the march to hell.

Mon, 03/30/2015 - 18:14 | 5943626 daveO
daveO's picture

The plan appears to be to take the US down this time, to be replaced with China. Obama doing exactly what his puppeteers want.

Mon, 03/30/2015 - 10:49 | 5941863 pods
pods's picture

To be blunt, it is none of my damn business if Iran or anyone else wants a bomb.

Nor is it the government's (of the US) job to meddle in that in any way.

We have had sanctions on Iran due to the Islamic revolt.  Which was the result of? Oh right, our fucking around there in the first place.

The USA is the arsonist fireman of the world.

pods

Mon, 03/30/2015 - 11:05 | 5941926 Oldwood
Oldwood's picture

I hope your indifference to Iran's nuclear disposition works out for you. We may all get what we deserve (as we usually do) but I don't think it heightens our intelligence to hasten it onward.

Its a little too late to think we can hide from this shit, be it our own fault or others.

Mon, 03/30/2015 - 12:37 | 5942240 oklaboy
oklaboy's picture

hope you have fresh batteries for your geiger counter

Mon, 03/30/2015 - 18:13 | 5943227 nailgunnin4you
nailgunnin4you's picture

To be blunt, it is none of my damn business if Iran or anyone else wants a bomb.

Nor is it the government's (of the US) job to meddle in that in any way.

 

Shhh, it's just oldwood, zerohedge's resident pensioner spending his days whinging about entitled youth, don't entertain him, he'll die soon.

Mon, 03/30/2015 - 11:18 | 5941961 Canadian Dirtlump
Canadian Dirtlump's picture

why was it ok back when your wood had alot less varnish on it?

 

http://upload.wikimedia.org/wikipedia/en/8/8b/Shah_of_Iran_building_two_...

 

 

Mon, 03/30/2015 - 11:38 | 5942030 Oldwood
Oldwood's picture

Maybe because the Shaw was an ally? Maybe because it was perceived that having a western ally in that region would lead to stability, and at that time nuclear power (not weapons) was considered modernity. And yes, they have been selling peak oil since 1920. God only knows how much the US was going to make from selling Iran nuclear technology while also driving the price of oil lower. Our constant intervention into other nation's affairs has a long and horrible history of blowing up in our faces, and like the current economic disaster consuming us, these consequences create such horrible alternatives that we see no other path than the one we are on. All of this is arguing ultimately over spilt milk as we are simply in a can kicking, delaying situation. If Iran does want the bomb, if not to use it directly but even as a threat, it will change everything. We are living with a constant push toward political correctness that will soon have us praying to Allah three times a day as to not offend those who threaten us with beheadings or a nuke. We are evolving into the sheep we always knew we were. And to that end, it serves not only our "enemies" but our leaders, as both only want to dominate us, each for their own agendas. These consequences may well be unintended by many who caused them, but I believe those who enabled them to do so knew full well where this would end up.

Ultimately power belongs to those who will use it and America is demonstrating it general unwillingness unless it is under the cover of darkness in a negotiation or drone control room. Iran, as well as most of the true believers have no such hesitancy to exercise their power and only seek more.

Let us watch how they use it and then decide who is "right" and who is "wrong".

Mon, 03/30/2015 - 16:15 | 5943248 nailgunnin4you
nailgunnin4you's picture

Iran, as well as most of the true believers have no such hesitancy to exercise their power and only seek more.

 

forthelulz

 

http://i.stack.imgur.com/HPV0g.jpg

Mon, 03/30/2015 - 18:34 | 5943676 daveO
daveO's picture

Us contracts back then. Chinese, German and Russian contracts now.

Mon, 03/30/2015 - 10:40 | 5941811 Canadian Dirtlump
Canadian Dirtlump's picture

I came in to say that crude is rejecting the binyamin mielkowski / satanyahu / netanyahu factor is at play here. Also, as I've said from day 1, the day the West and the Sauids have had enough of this, they'll make it stop.

 

The Dirtlump's wheel of geopolitical gong shows that will help solve low oil prices:

1) NATO intervention in Libya now that Belhaj ( file photo : http://libyanwarthetruth.com/sites/default/files/field/image/belhaj_mcca... ) is officially a prominent member of ISIS there.

2) Satanyahi attacks Iran with the indirect help of the west and saudis

3) the West finally presses Russian into action

4) Yemen related false flag which sees a tanke go down sparking more war

5) False flag attack of American storage facility or other oil infrastructure by disgruntled patriot group ( bonus points if they are simultaneoulsy aligned with Iran AND ISIS AND Russia).

 

Dirtlump's real solutions:

1) a shit fuck casino market having the grand mal seizure it deserves

2) the layer of North american production built on easy money going tits up

Oh yeah and:

3) Nuke Riyadh and Doha

 

We know demand and supply weren't THAT much out of whack to force this big of a correction, but this market is merely feeding off itself.

Mon, 03/30/2015 - 09:41 | 5941539 ukspreads
ukspreads's picture

Oil is a "Buy" !

Mon, 03/30/2015 - 10:05 | 5941632 saveUSsavers
saveUSsavers's picture

$20 oil??? IN YOUR DREAMS

Mon, 03/30/2015 - 10:27 | 5941754 sessinpo
sessinpo's picture

The dream was peak oil and $200+ oil. What a load of crap that was. But I told everyone that commodities will come crashing.

Now as everyone bitches about beef prices, they will peak this year as I have predicted. Time will tell. I've been right so far.

Mon, 03/30/2015 - 10:48 | 5941854 ukspreads
ukspreads's picture
Past performance is not a guide to future performance
Mon, 03/30/2015 - 11:00 | 5941911 Wild Theories
Wild Theories's picture

I'm interested in hearing your reasoning for peak beef, I've been doing some reading on beef/cattle in my spare time, but so far I've only looked at the supply side(supply side info is easy to look up), US/Australian cattle stock/supply issues etc

discretionary demand for beef peaking because people are going poor?

Mon, 03/30/2015 - 09:49 | 5941569 Dubaibanker
Dubaibanker's picture

Yemen has changed a lot of geo political trends unless it stops right away.

US-Iran deal will make things complicated before it actually settles down.

If anyone wishes to read all about the new LENR technology which is bringing oil price down more than any other trend. http://www.currentscience.ac.in/php/toc.php?vol=108&issue=04

Now appearing in more peer journals.

The oversupply due to US oil production becoming more than Saudi oil production is making matters even worse.

WTI should touch below 40 next month, though I was expecting it to happen before end of March. Will remain volatile and should go to 20 or below before June as the global unemployment (due to bank shutdowns, oil company shutdowns, retailer shutdowns, shipping co shutdowns, commodity company shutdowns, miner cutbacks) causes demand also to slide while the supply keeps rising.

Mon, 03/30/2015 - 09:54 | 5941585 LawsofPhysics
LawsofPhysics's picture

Wake us when any of this new technology is providing all the power for just one city.  Even the best fusion designs still require fuel and generate waste.

As far as "peer review" goes, be aware that as funding gets tighter and tighter, scientists are doing whatever it takes to acquire funding.  That includes lying.  Many retractions as of late in the scientific community...

Remember, absolute power corrupts absolutely...

moral hazard is now providing so many more reasons why we should have let all those fuckers go bankrupt in 2008/2009...

Mon, 03/30/2015 - 10:12 | 5941675 Dubaibanker
Dubaibanker's picture

LawsofPhysics,

How about 20,000 homes to start with?

Just one solar energy new tech plant is doing so....

Shams 1 celebrates second anniversary

Solar Rises as Global Energy Opportunity  The World's 10 Biggest Solar Farms

Hope this helps.

However, funding is not required because it needs to be all done by the Govt themselves since the demand is so high and rising and the private players are not coming forward.

Most innovations in the past from banking to insurance to railways to airlines started usually from Govt funding and then were handed over to private sector wherever feasible. One of the mandate of Govts globally is to look at climate, employment, social costs, peace etc without looking at it through the prism of profitability.

Mahatma Gandhi famously replied to a British journalist that if you think that the job of Indian Railways is to generate profits then you are absolutely wrong. It's main function is to continue to keep millions employed and thus keep peace and harmony.

LENR may be few years in the making but this technology along with solar and wind etc will keep rising as countries like China close down their coal plants and have a need for more green energy sources. The future tech breakthroughs will also come from China who have been filing the highest number of patents in the world for the last few years. While Abu Dhabi like cities will also take the lead along with other top nations. Abu Dhabi has invested over USD 15bn in the last 8 years in just 1 project and brought MIT here as well to collaborate.

If growth of green energy continues and oil demand declines while oil supply rises, there can be only one consequence: Much lower oil price. 

If LENR or some radical technology takes off, then we may never even need oil in the future, like we never needed bullock carts once the railway engine was created! Or did not need spears once gun were created!

IMHO, that day will come in the next few years......

 

Mon, 03/30/2015 - 10:21 | 5941729 Oldwood
Oldwood's picture

Ah, the sacrifices government and bankers make for us. Thankfully they are always well rewarded for them.

Mon, 03/30/2015 - 10:28 | 5941758 Dubaibanker
Dubaibanker's picture

:)

Most bankers at the top end should be jailed...When they enjoy profits of their fraud...why should they not get jailed for the same fraud when caught.....how in hell are they allowed to get away scot free?

Some Govts still take care of their citizens...currently some African nations...China....UAE....NZ....and a few others come to mind where not only innovation but, employment, growth and stability exist.

Bankrupt Govts are specifically excluded.

Mon, 03/30/2015 - 11:08 | 5941934 Oldwood
Oldwood's picture

There is growth and stability in China? We must be reading different sources. Virtually all of China's QE credit is going to refinance bad debt...big bad debt. And If you haven't noticed most areas where your beloved "stability" does exist, it does not coexist with anything we would refer to as liberty.

Mon, 03/30/2015 - 12:07 | 5942152 FredFlintstone
FredFlintstone's picture

Railways in the US did not start with government funding. Think Vanderbilt

Mon, 03/30/2015 - 12:14 | 5942174 FredFlintstone
FredFlintstone's picture

China is the hot bed of innovation?

Tue, 03/31/2015 - 05:14 | 5944745 Max Steel
Max Steel's picture

yes it is . many think china is a copying nation but in reality it isn't . 

Mon, 03/30/2015 - 10:21 | 5941727 MEAN BUSINESS
MEAN BUSINESS's picture

Speaking of new technology, care to share any pearls on Golden Rice? I see you missed the big story here last Friday. Aren't you the dude farming the thousands and thousands of acres?

Mon, 03/30/2015 - 11:09 | 5941935 screw face
screw face's picture

...what war now.

Mon, 03/30/2015 - 12:33 | 5942227 strannick
strannick's picture

Time to buy a Hummer

Mon, 03/30/2015 - 09:32 | 5941478 NoDebt
NoDebt's picture

The talking heads over the weekend were saying the deal is already done.  Obama's job is just to sell it to Europe, which makes some sense.  

You KNOW this is gonna be a bunch of secret executive orders that will NEVER see the light of day.  There won't be anything for the Senate to ratify.

Obama could give two shits about domestic shale drilling.  In fact, he's prefer it had never been invented.  Poking them in the eye is POSITIVE from his perspective.  All he wants is his legacy "peace in our time" paper he can wave over his head.

Mon, 03/30/2015 - 10:08 | 5941649 Oldwood
Oldwood's picture

World chaos and destruction of the oil industry in one move. There is a plan.

Has everyone forgotten his stated agenda or just parroting off of his talking points? Best of all, if left up to the media, after all of this blows up, none of it will stick to Obama anymore than it did for Clinton. Media provides the Teflon and only they decide who gets a "liberal" coating and who becomes fat in the fire.

Mon, 03/30/2015 - 09:27 | 5941479 khakuda
khakuda's picture

We'll see.  It would be a dream come true to exchange $20 fiat currency for a barrel of oil which is vastly more useful.

Mon, 03/30/2015 - 09:49 | 5941522 LawsofPhysics
LawsofPhysics's picture

Yes, and yet the bankers and financiers can still access all the money they want for free (ZIRP) with the click of a button...

tick tock motherfuckers...

with respect to oil, my prediction is that it will remain range-bound from $45-50 until WWIII breaks out in earnest.

If we learned anything from the Soviet Union we should all be keenly aware just how fast "low prices" can turn into shortages once your system is taken over by a bunch of corrupt/immoral/fascist central planners.

Mon, 03/30/2015 - 09:39 | 5941530 NotApplicable
NotApplicable's picture

I do not see OPEC surviving as a controlling entity if crude drops to $20. At that point, every producer will be desperate for revenue, and will pump for all they're worth.

Mon, 03/30/2015 - 10:20 | 5941720 GMadScientist
GMadScientist's picture

In and of itself, not really, it's basically toxic sludge...but the 1.6MWh trapped inside is.

 

Mon, 03/30/2015 - 10:32 | 5941774 sessinpo
sessinpo's picture

khakuda   We'll see.  It would be a dream come true to exchange $20 fiat currency for a barrel of oil which is vastly more useful.

---

Actually it is a bad thing and you are an example, I am sorry to say, that doesn't understant. This is a deflationary crash, like the Great Depression.

Do you think those people were happy that there were lower prices? NO. Why because they have NO money. It didn't matter how low prices went. Do not think of the current times in a linear fashion. Imagine your life with no income to pay for anything. That is deflation.

Mon, 03/30/2015 - 12:16 | 5942110 khakuda
khakuda's picture

Your analysis is much too simplistic to even begin to critiique.

I challenge you to show me the rampant deflationary crash.  Are stock prices or bond prices or house prices down 90%?   Is your supermarket bill lower every week or your rent or college tuition hitting levels so low they haven't been seen in years?  Is half the population out of work?

You are also confusing the lack of value creation/jobs with prices.  Rampant inflation or deflation can screw up the real production system and destroy value.  We have neither rampant inflation nor deflation.

As another comment mentioned, the empty barrel may be worth $20.

An oil price drop and rising prices everywhere else (which is what has been happening) may just be an indication that fast growing supply has outstripped demand for now in that specific sector.  Oil is a finite resource, so that necessarily won't always be the case.

Mon, 03/30/2015 - 09:33 | 5941497 Usurious
Usurious's picture

 

 

$20.........one must ask..........is this by design or accident??

the (high) oil price is like usury.........it is a theft of your labor!!

Mon, 03/30/2015 - 09:37 | 5941518 LawsofPhysics
LawsofPhysics's picture

Good question, ask yourself another question;  how much labor (energy) is required in order to extract that oil?

 

All it takes is the click of a button to "create money",  still want to argue that this is the same thing?

good luck with that.

Mon, 03/30/2015 - 09:55 | 5941592 Usurious
Usurious's picture

well Kudo's to Henry Kissinger/Golda Mier for tying our 'currency' to a so called 'finite' resource........

Mon, 03/30/2015 - 10:32 | 5941780 HardAssets
HardAssets's picture

What do you know in the current system that isn't a Ponzi or some other kind of fraud . . . from media, to politics, to fiat money, to the stock 'market', to the 'Drug War', and the 'War on Terror', and the oversized fake tits on many Hollywood 'celebrities' ?

Eventually truth and Reality hits.

Mon, 03/30/2015 - 10:22 | 5941733 GMadScientist
GMadScientist's picture

EROEI runs about 20:1 (20 out for 1 burned on extraction).

Mon, 03/30/2015 - 10:01 | 5941606 wrs1
wrs1's picture

How much gold for a barrel of oil? Gold is too expensive still.  Maybe your labor isn't worth what you think?  High prices aren't usury, you don't borrow food you use money to buy it. 

Mon, 03/30/2015 - 10:34 | 5941791 sessinpo
sessinpo's picture

Usurious    $20.........one must ask..........is this by design or accident?? the (high) oil price is like usury.........it is a theft of your labor!!

---

How about a third choice you left out. That market forces are taking over, despite manipulation.

Mon, 03/30/2015 - 10:47 | 5941852 Usurious
Usurious's picture

exactly.....thats what Im saying..........it is entirely possible that the world is going back to a pre-petro-dollar market oriented OIL price........which means it is by DESIGN...........They overshot the high oil price by 25 yrs or so.....now they will pay for their greed (the banksters/oilmen)......

Mon, 03/30/2015 - 18:41 | 5943697 daveO
daveO's picture

The FED still exists. QE just ended in Oct. Free markets are only temporary.

Mon, 03/30/2015 - 09:35 | 5941510 LawsofPhysics
LawsofPhysics's picture

Sure, and $20 gold too.  At which point, good luck taking delivery...

Mon, 03/30/2015 - 09:41 | 5941540 Korea98
Korea98's picture

Iran already sells most of its oil on the underground market....no?  

While it might make it be more transparent, I don't see too much extra oil on the market due to this.

I would also add that we are in negotiations but it seems like Obama would sell his first born for a deal with Iran so it looks like a deal WILL happen.  Pretty much they get nuclear legitamacy and sanctions wiped off the books and they give...um...well...nothing.

Mon, 03/30/2015 - 09:45 | 5941556 LawsofPhysics
LawsofPhysics's picture

Yes, like I keep telling everyone I know.  Get your tribe in order and get long black markets and sharcropping...

Mon, 03/30/2015 - 10:10 | 5941663 Oldwood
Oldwood's picture

The underground market comes at a price that is part of the oil pricing scheme, and do you think an unrestricted market will not flow more than a restricted one? Has marijuana sales increased in Colorado?

Mon, 03/30/2015 - 10:30 | 5941766 GMadScientist
GMadScientist's picture

Exactly right. They take a deep discount selling to the Chinese and would love to sell to the rest of the world too.

Mon, 03/30/2015 - 09:54 | 5941588 henry chucho
henry chucho's picture

The empty barrel to put the oil in is worth $20 dollars,so your saying oil will be given away for free by June?

Mon, 03/30/2015 - 10:19 | 5941716 Oldwood
Oldwood's picture

Oil is already selling below cost of production, so what bottom price to you expect to see? We have market instability in all things right now, so prices are nothing but destruction. Miners will fail, oil producers will fail, the economy will fail, and yet the result will not be lower prices and a higher standard of living for most. It will be destruction. BE the ant or the grasshopper and decide if times of plenty are a signal to relax and enjoy, or an opportunity to prepare for the coming winter. Like the climate changers would like to believe that they can control the weather, the Fed and government central planners would like to believe they can control the economic weather. Neither have any idea what consequences lie ahead from their actions.

Mon, 03/30/2015 - 10:26 | 5941751 GMadScientist
GMadScientist's picture

You can cup your hands and we'll give you two barrels.

Mon, 03/30/2015 - 09:58 | 5941603 wrs1
wrs1's picture

Plan on $300 gold.

Mon, 03/30/2015 - 10:08 | 5941650 1000yrdstare
1000yrdstare's picture

Plan on $300 gold.

 

 

Paper or Phyzz?

 

That is the question...

Mon, 03/30/2015 - 10:42 | 5941825 sessinpo
sessinpo's picture

The same.

When you buy or sell gold, are you asked physical or paper? Get over it man.

Paper gold is simply a derivative or side bet on gold prices. Which is why no long gold paper has called that position. Those side bets are offset with very little effect on actual gold prices.

Mon, 03/30/2015 - 10:00 | 5941608 j0nx
j0nx's picture

Really doesn't matter to me or the average Americans as gas prices are all that matter and they continue to have no basis in reality compared to oil prices.

Mon, 03/30/2015 - 10:21 | 5941731 cn13
cn13's picture

Crude oil is not going to $20/barrel.  The Iranian news has likely already been discounted into the market price.  That is why they call it a futures market you know.

I would guess the market will rally once a deal is announced regardless of the conclusion.  If a deal is not reached, the shorts better watch out.

Mon, 03/30/2015 - 10:47 | 5941837 sessinpo
sessinpo's picture

I doubt it. A deal or no deal has no effect on supply. So far everyone on this thread has been focusing on supply and ignoring demand.

DEMAND IS DOWN. That is why supply is up and storage tanks are full. DEFLATION

Mon, 03/30/2015 - 10:37 | 5941771 earleflorida
earleflorida's picture

"Why Iran wants Russia in OPEC"     3/22/09

http://middleeastanalyst.com/2009/03/24/why-iran-wants-russia-in-opec/

and this current site;        http://pjmedia.com/

Mon, 03/30/2015 - 10:32 | 5941777 thecrud
thecrud's picture

No OPEC is not have have repeatly said as much. Prices will go where prices go.

You Americons cut were not. How fucking much clearer can they fucking make as they increaded their production to all time highs you dumb mother fucker.

Mon, 03/30/2015 - 10:42 | 5941823 JamaicaJim
JamaicaJim's picture

Fuck all this Kabuki shit....

5 years out....

I'm nibbling in now...and buying at 20 and 10...

The shit does not grow on trees....period.

Mon, 03/30/2015 - 10:44 | 5941828 Mi Naem
Mi Naem's picture

This just in from Comedy Central, er, I mean CNBC:

Iran like a modern day Nazi Germany: Ex-CIA chief

"Woolsey said (of Iran) in a CNBC ' Squawk Box ' interview. 'They are an imperial power and trying to become more of an imperial power.' ... 'They'll cheat,' he said.

It's far better that we have our own corrupt, leashed ragheads fulfilling that role. 

Mon, 03/30/2015 - 18:47 | 5943711 daveO
daveO's picture

Yea, they ask him instead of the one they framed.

With his honey pot;

http://www.charlotteobserver.com/news/politics-government/article1219495...

Mon, 03/30/2015 - 13:00 | 5942353 devo
devo's picture

What are the odds ZH is right and $20 oil looms? I'd say 1%.

Mon, 03/30/2015 - 18:48 | 5943715 daveO
daveO's picture

Telegraph article=MSM=propaganda. Probably time to buy.

Mon, 03/30/2015 - 13:31 | 5942524 DontFollowMyAdv...
DontFollowMyAdviceImaDummy's picture

i dunno about oil dropping to $20... if it does, EVERY AIRLINE AND TRANPORTATION COMPANY THAT USES A PETROLIUM BASED PRODUCT SHOULD BUY AS MANY $20 CONTRACTS AS POSSIBLE... i would love to see that because i miss those days of $19 one-way SWA trips to LA & Vegas from San Jose.

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