As WTI Passes $105, Guardian Says Iran "Military Action Likely", Would Send Crude Soaring

Tyler Durden's picture

Between the Chinese 'surprise' RRR and the Iran export halt to UK and France (and escalating tensions), Oil prices are off to the races this evening. WTI front-month futures have just broken $105 (now up more than 10% in the last two weeks), the highest levels in over nine months and just 8% shy of the 5/2/11 post-recession peak just under $115. Brent (priced in EUR) remains off last week's intraday highs (as EUR strengthens) but still above the pre-recession peak but in USD it traded just shy of $121 - well above last week's peak. Of course, this will be heralded as a sign of demand pressure from a 'growing' global economy rather than the margin-compressing, implicit-taxation, consumer-spending-crushing supply constraint for Europe and the US that it will become in the not too distant future. As we post, The Guardian is noting that US officials are commenting that "Sanctions are all we've got to throw at the problem. If they fail then it's hard to see how we don't move to the 'in extremis' option." The impact of any escalation from here is gravely concerning with PIMCO's $140 minimum and SocGen's $150-and-beyond Brent prices rapidly coming into focus - and for those pinning their hopes on the Saudis coming to the rescue (and fill the Iranian output gap), perhaps the news that our Middle-East 'allies' cut both production and exports in December will stymie any euphoria.

From The Guardian: US officials believe Iran sanctions will fail, making military action likely

Growing view that strike, by Israel or US, will happen
• 'Sweet spot' for Israeli action identified as September-October
• White House remains determined to give sanctions time

"It's not that the Israelis believe the Iranians are on the brink of a bomb. It's that the Israelis may fear that the Iranian programme is on the brink of becoming out of reach of an Israeli military strike, which means it creates a 'now-or-never' moment," he said.

"That's what's actually driving the timeline by the middle of this year. But there's a countervailing factor that [Ehud] Barak has mentioned – that they're not very close to making a decision and that they're also trying to ramp up concerns of an Israeli strike to drive the international community towards putting more pressure on the Iranians."

Chart: Bloomberg

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Yen Cross's picture

 Is this " Kill Bill", FUCKING # # # 3 Slewie?

slewie the pi-rat's picture

when the prop-wash sez that israel should attack iran NOW

and the reason is:  or it will be too late

[it's now or never~~~can you imagine israel singing that song to iran to "embrace" in blowing the fuk outa each other?  Hahaha!]

well, i guess the neo-cons and other puppets will start twitching and want to shoot somebody, but, personally, i find such "reasoning" neither logical nor compelling

 

AU5K's picture

At least higher oil prices arent factored into CPI "Core" inflation figures, LOL.  Everyone will see $5/gallon but the government will tell us its just your imaganation, core inflation is flat, vote obama. 

 

Looks like a pretty clear inverted H+S on crude.  $130, minimum target. 

Yen Cross's picture

 The MSM is not even addressing Memorial Day? WTF ? That is when people travel. They got lucky this winter.

 

  Ok, Know it alls. How many products does a barrel of light sweet crude yield? Hint) over 35 and under 50!

adr's picture

Speculator driven bullshit once again. So China is trading for Iran's oil, oil the US doesn't buy anyway, which means China will be buying less oil from exchanges. Why pay inflated per barrel price in dollars when you can trade items for Iranian oil. US and European consumption is cratering so the price of oil increases??? Sorry I don't see a supply issue. In fact it looks like on the surface China making a grab for what ends up being cheaper Iranian supply should cause an even further increase in global stockpiles.

You want oil to go to $30 a barrel, change the rules to force delivery of any oil contract held for 30 days and ban the rollover into future contracts. 90%+ contracts are still held by traders who could never take delivery of a single barrel.

Based on demand oil shouldn't be $18 but anything above $35 is lunacy.

Caviar Emptor's picture

lol. 

GM said it achieved double-digit jumps in five of its top 10 markets last year, including China. GM marked a 12.4 percent sales rise in Russia and a 10.4 percent rise in Brazil.... But it did even better in China, selling 2.35 million vehicles there, up 29 percent ....

http://www.huffingtonpost.com/2011/01/24/gm-sales-china_n_812934.html

Just cause you don't see it from your back porch don't mean it ain't happening elsewhere. It's a thirsty, thirsty world

IQ 101's picture

Thirsty for what? Huffington post, the huge fucking joke Huffington post?

Are you Greek, or, German?

The Huffington post, please, this is a joke right, Sarcasm, Parody, French farce, or are you actually quoting G.M. statistics compiled or published by the Huffington Post on Z.H.?

G.M. sez ????????

Lord,help us.

Caviar Emptor's picture

 

You're not seeing the big picture. Maybe you don't want to. Open your eyes. 

 

Japan’s Trade Deficit Hits Record as Energy Imports Surge

 

Energy needs accounted for most of the gain in imports in January.

 “The deficit is still expanding against a background of increasing energy imports,” said Masaaki Kanno, chief Japan economist at JPMorgan Chase in Tokyo. “Unless we see a significant increase in the operating rate of nuclear power plants, eventually the rising cost of power will be translated to the corporations.”

http://www.nytimes.com/2012/02/20/business/global/japans-trade-deficit-h...

 

Moe Howard's picture

South Korea and Japan are major Iranian oil customers, and they are not boycotting or stopping. Keep that in mind.

Bansters-in-my- feces's picture

*ROTHSCHILDS say cashflow is low and war is on the list of GOOD money makers.

*ROTHSCHILDS say it has worked great more than one time.

Bolweevil's picture

http://www.faster-faster.com/
The future is upon us. Plug yer bike into a portable solar panel and FTW! $10 gas, woot!

jomama's picture

i'm get that rigged onto my downhill bike!  looking for an affordable solar generator...

Coldfire's picture

Knock, knock.

Who's there?

Armageddon.

Armageddon who?

ARMAGEDDON OUT OF HERE!

JohnKozac's picture

From PIMCO:

"...In this case, we would expect prices could reach previous all-time highs of $145/bbl or even higher depending on issues with shipping. The IEA and Saudi Arabia can meet market needs, but the increase in uncertainty and the loss of spare capacity would affect pricing. In this case, after a few months, we would expect prices could fall back to $130 to $135/bbl range."

 

read full article:

http://www.zerohedge.com/news/pimcos-4-iran-invasion-oil-price-scenarios...

This jives with Nomura ($250 oil) and many other analysts. What would happen to Western economies if oil rises to $140?

Oldwood's picture

Is this where we sign up to be in the official jew haters club. I didn't see it posted but judging from the comments there must be a sign up page somewhere. I thought we were supposed to hate bankers and politicians and that the muslims are a peace loving religion. I'm soooo confused....and we are supposed to be against killin and stuff but now we are supposed to kill jews? This is just too hard!

IQ 101's picture

I missed that post, I think the point is that nobody should be killing anyone who is going about their peacefull business, no harm , no foul.

No injured party, no crime.

Julio looks mean and tough, i must shoot him before he shoots me,mentality B.S.

Pre-emptive cowardice.

 

BudFox2012's picture

This is wonderful news.  I just tuned up my V-8 Interceptor and have it covered and patiently waiting in the garage.  I have a semi load of Dinky Di dog food stockpiled, several pairs of football shoulder pads, a bladed boomerang, a shot gun with bad shells.   WWIII and mad max, here we come! 

linrom's picture

Why bother with Iran, it's no more a country than Iraq. It's present regime is driven to spent all its resource money on militarism and nuclear weapon development. It also funds private militias in Gaza and Lebanon. I have no doubt that US is funding Mujahideen. Time is running out on the Ayatollahs. Someday the black clothed tyrants will be the ones hanging from the cranes.

Westcoastliberal's picture

So here's my life, Ladies & Gents.  Out & about to see the 2nd run Sherlock Holmes flick & notice the car has about 3/8's left in the tank.  Should I fill up now, or risk even higher prices next week?  Chevron is $4.09, was $4.07 Wednesday when I bought 10 gallons for my SUV beast.

Tell me what you would do, and I'll post the results and my actions later tonight.

HungrySeagull's picture

Fuck it, fill the pig.

This piggie has 5 gallons, that piggie also has 5 gallons and they are named the Jerry family... so forth.

So many piggies...

Westcoastliberal's picture

I did.  $47 and change, 2nd such "investment" this week and didn't even fill up the SUV beast.  Glad she's a 6 cyl though.

Yen Cross's picture

 Know  ( one person), Hates anyone on this site!  We are the Best of the Best! 

   GET MAD on Some Ones time! Not MINE! you people are my kind!          TRAMS>SMART>}

.

 


Sizzurp's picture

Hopefully this will wake folks up to the ineptitude of starting a shooting war with Iran.  Maybe they will even wake up and realize we don't need the war monger Sanitarium either.  If the Israelis go full retard and attack Iran, we are going to get immediate $10 gas minimum and rationing.  That will turn these fake green shoots crap brown in a hurry.

chump666's picture

"Iranian Admiral Habibollah Sayari said the naval deployment to the Mediterranean would show "the might" of the Islamic republic to regional countries, and also convey Tehran's "message of peace and friendship," according to the Fars news agency."

Israel/Iran war on the cards.

http://www.marketwatch.com/story/iran-sends-warships-into-mediterranean-...

chump666's picture

and it will be a stand up fight.    line drawn.  missiles tossed back and forth, aerial battles, drone battles, navel battles...etc etc etc

Also, the first of the 'dirty' wars. i.e all out cycler warfare, infrastructure hacks, essential amenities disrupted.  Already there is a FX/economic war taking place trying to force more inflation on the Iranians.  

It will be bad.

moondog's picture

My fear is that Chinese/Russian support will come from their cyber warfare divisions.

The Chinese have been hacking US .gov infrastructure for years. How vulnerable is our military and energy infrastructure I wonder?

This may be the biggest mistake that the US and Israel ever made in underestimating support for Iran.

HungrySeagull's picture

One half inch separates the Military Net from the civilian net.

oldman's picture

Tyler, why is it that each time I vote up or dpwn that the page has to reload; am I doing it wrong?
Frustrated because of a wireless connection on a modem in another banana republic om

dwdollar's picture

Sounds like you have JavaScript turned off. It's something you have to put up with if you want JavaScript turned off because of the advertisements.

dwdollar's picture

I fear the day when the Iranians and North Koreans are gone as a "threat" to the "free" world. Who will the bankers vilify when they control every government? People like us most likely. I try not to think about it.

linrom's picture

This does not justify support for Iran. Look at Hugo Chavez,. A so called Latin-Am revolutionary in a Catholic country supporting Muslim tyrant like Ahamadinejad?

 

 

falak pema's picture

Its called an anti-imperialist (US) front.

Even French king, Francois I, a true catholic,  allied with Souliman the Magnificent of Ottoman empire (infidel moslem), against Holy roman emperor Charles V Hapsburg; then true king of the world.

'Cos Charles was barking down their combined underwear!

Like Ahmed Nijad/Chavez feel about good ole USA!

ekm's picture

http://www.youtube.com/watch?v=hUPEVJqO2Nk&feature=player_embedded

Hey Day Traders

Click up there and learn some geo-policital macro. It may come handy.

 I don't necessarily agree with the analysis, but you may all learn that Israel+Saudi Arabia+USA+Europe are all ALLIES against Iran.

 

http://www.youtube.com/watch?v=J6T1hQnLl64&list=UUrmm_7RDZJeQzq2-wvmjueg&index=16&feature=plcp

Right after 7th minute pay attention to 50% currency devaluation in Iran and sky rocketting food pricing.

One more, for you.

yogibear's picture

People are used to $4.00/gal gas. Onto the next price point, $5.00/gal gas and then onto $6.00.

Americans will just say "charge it!".

Add in the 20 to 30% (or more)  inflation in food price, it's definitely having an impact.

With Bernanke and the federal reserve printing this should be one huge inflation party! 

While both Bernanke and the government both deny the inflation .Transitory according to the fed.

Caviar Emptor's picture

Yes! 

And Ben can print more to compensate for the increased charging to pay for gasoline! And food! 

Makes sense, right? 

After all, if we're all millionaires and billionaires then everything will seem cheap, cheap, cheap! 

jomama's picture

the trucking industry alone would be hit hard by 6$ gas

Fix It Again Timmy's picture

Yes, we are having another lovely little war in the ME, R.S.V.P.....

Yen Cross's picture

 Damn I "Repect",  Knocking IRAN down! Let's get it done!

ebworthen's picture

And there is no inflation, just tell yourself that when you fill the tank kids, and when your groceries and delivery prices and airline tickets and the price of anything that remotely depends upon oil goes up:  repeat after me -  "Phew!  I'm glad we don't have inflation too!".

ekm's picture

And by the way, WTI is getting higher by the weak hands.

Think, if Iran has less customers there will be less competition for their crude oil (80% of their exports - stop and think).

Then the remaining customers will have the upper hand and demand lower prices. I think this is all propaganda, but in case the iranians lost their brain remnants, I bet right now China is making deals with Iran for much lower prices. Iran would be forced to do so in order to keep the oil rigs working and to avoid back up in the pipeline.

Caviar Emptor's picture

What's good for the propagoose is good for the propaganda

ekm's picture

Ok. It's your risk, it's your money. Good luck to you. Just make sure you're the first one to cop out once all weak hands are in as suckers.

Yen Cross's picture

 Leave the Guy Alone! EKM is Reasonable.

Caviar Emptor's picture

ok, ok! I actually think there's a chance he could be right. But watch, every time crude prices drop a bit, there's demand right there to snatch it up

ekm's picture

Which kind of demand?

- Consumption

- Hoarding

My money is on Hoarding until they run out of storage space, then DUMP.

Caviar Emptor's picture

Both, I think. But think of how many people are on the road for the very first time in China, India, Brazil in the last 10 years. Numbers have gotten big