Has Iran discovered a Simple Profitable Method(SPM) for generating more cash? Is CL going to trade "well" the next couple of months due to Iranian moves? What about Oil company stocks. Will you be playing? The Iranians need cash, a fact. The Russians are not happy with not being paid by Iran for work on projects including nuclear related work.Client hizbollah always needs a cash flow to buy supporter and fund social and military projects. The Iranians need to fund their own military research and manufacturing and acquire new military technology from others. News reports and analysts say the Iranian economy is not in very good shape with resultant political dissatisfaction with the government. More cash is needed here. By grabbing the British servicemembers the Iranians may see a fairly low risk opportunity to increase their oil revenue. By orchestrating the current situation "properly" they could easily effect more volatility in oil markets with attendant price increases. Will you be looking to trade CL? Will you play the oil/service stocks??
Well, you have to define "trade well" first. My thought is that the market figured out on Tuesday's spike that some geopolitic premium must be added to the CL value. Time will say if we have a quick resolution on the iran-british issue erasing that premium. I'm looking for a 63-68 or 66-70 range in the coming sessions. I think trade "well " can be defined as "text book" trades with less whipsaws, no just trading up. PS: i don't think iranians are so stupid to put theirselves on a "target" position just to have expensive OIL for a couple of weeks.
just noticed this thread after posting on another, should have done it here: As I noted before from other sources, Iran wants prices up while Saudis want it lower. Iran tried the nuclear angle and it worked for a while, but crude started dropping. Now the sailors issue has brought them back up. Many in the oil industry must be quite happy with status quo, may even wish for more sabre-rattling. Iran is almost going broke importing refined products from India at huge cost, lacking maintenance for aviation, military etc. http://tinyurl.com/379vao On the other hand, an attack by Britain or US can be ruled out completely with the "stretch" in Iraq and lessons learned already. they are going to try diplomacy to the end this time...
"PS: i don't think iranians are so stupid to put theirselves on a "target" position just to have expensive OIL for a couple of weeks." ..................................................................... Yes, i agree. The Iranians are not stupid. And, i believe they are playing a fairly low risk hand at present, even taking into account their nuclear "game". There are social, political, and ethnic divisions present in Iran which the leadership must always deal with. Persians make up little more than half the population. This is the core powerbase needed to hold the country together. According to many reports the Americans have been working to take advantage of the various internal problems in order to get the government to do what we want them to do. The core is not united as evidenced by the fact that conservatives did not do too well in recent elections. It's pretty well established that the Americans, Saudis, and others think their best option is to exploit internal division. The Iranians are well aware of this strategy. So, the reasoning is that the Americans/British will not engage in any significant military moves against them. Why? Because to do so would most certainly strengthen the core Persian population, unifying it under the banner of Iranian nationalism. This, in turn, strengthens the regime in dealing with it's minorities which is just opposite of what the Americans want. The Iranians can thus play a low risk hand. So, I am looking for more volatility in CL and oil stocks - more trading opportunities. Some good swings.