"Oil Supply Threat highest since 1970s" -Deutsche

Discussion in 'Wall St. News' started by tenthousandmen, Feb 16, 2012.

Will crude remain above $100 throughout most of next quarter?

Poll closed Mar 17, 2012.
  1. Yes, above $100

    13 vote(s)
  2. No, below $100

    4 vote(s)
  1. http://business.financialpost.com/2...since-the-1970s-deutsche-bank/?__lsa=e937492e


    Oil supply threats highest since the 1970s: Deutsche Bank
    Yadullah Hussain Feb 16, 2012 – 11:47 AM ET | Last Updated: Feb 16, 2012 12:48 PM ET

    The world has not seen the threat of oil disruption of this magnitude since the 1970s, when an Arab oil embargo, the Arab-Israeli war and the Iranian revolution interrupted crude supplies, says Deutsche Bank.

    “The world faces oil supply risks from a multitude of sources, not only in the Middle East but also in Africa. In our view, not since the late 1970s/early 1980s has there been such a serious threat to oil supply,” wrote Soozhana Choi, Deutsche Bank’s head of Asia commodities research, in a note to clients.

    The Strait of Hormuz is the world’s most critical chokepoint through which 35% of the world’s seaborne traded oil passes through, but Ms. Choi believes the potential Iranian disruption of shipping in the Strait as “a low probability” event, especially as it will hurt Tehran more.

    While oil markets are climbing a wall of worries on Israel-Iran tensions, they are also concerned about a whole host of other oil-exporting countries in the midst of political turmoil, such as Bahrain, Libya, Iraq, Nigeria and Yemen.

    “These are the countries we believe carry the highest risk of fresh or persistent supply disruption. At present realized disruptions are approximately 1.2 million bpd, based on our assessment which at present excludes Iranian exports affected by EU sanctions,” said Ms. Choi.

    Add Sudan to the list of troubled oil exporters. Recently, Sudan and South Sudan, the world’s newest country, were locked in a dispute over transit fees halting the latter’s entire oil production of about 360,000 barrels per day.

    Ms. Choi think the gloomy supply outlook will compel key oil importers such as China and India to increase their petroleum reserves.

    “Just as the events of the 1970s instigated the creation of the IEA and strategic reserves in the West, countries outside of the IEA membership in Asia, notably China and India that are already seeking to build their own strategic reserves are likely to see this period of heightened risk to global oil supplies as further impetus for stockpiling initiatives,” wrote Ms. Choi.

    Current events may also spur policy makers in China to prioritize development of oil reserves and even increase and accelerate the timeline for strategic petroleum reserve (SPR) targets. China is aggressively pursuing a plan to develop SPR reserves with a target cover of 100 days by the end of this decade. India, too, is building strategic reserves, though its target is far less ambitious than that of China, wrote Ms.Choi.
  2. S2007S


    I guess thats why gas prices near me are up about 25 cents in the last few weeks, paid over $4.00 for gas this week and its only going higher each day. Oil trading above $100 a barrel, if tensions continue gas prices could go to $4.50-$5.00 in the next few months...would be nice if oil was around $30-$40 a barrel where it should be, but thanks to BUBBLE ben bernanke and his QE oil is now skyrocketing.

  3. LOL
  4. Iran cracks me up, wish I had the link, but even if you don't follow it that close you know US is trying to get EU nations to quit buying oil from Iran.

    So in a conciliatory manner, just to prove to the world they are not bad guys, Iran announced if that's what you want, we promise not to sell oil to 5 EU nations.
  5. Would be BETTER if oil were at $200/bbl for a while to assure Odumbo doesn't get reelected by greedy, tit-sucking parasites and Socialists.
  6. S2007S


    I was thinking at $200 they would finally tap the oil reserves to bring down the price at the pump by a few pennies, haha. Its a fucking joke, $103 dollar oil, at the rate BUBBLE ben bernanke is pumping trillions into the economy we should be at $125 oil by summer and $150 by the end of the year, just keep in mind something is going to give sooner or later, you cannot have surging oil and a growing economy, sooner or later the consumer is tapped out which should be coming soon....looks as though prices at the pump will be nearing record highs sooner than later.
  7. When you think about it for a moment, the libtards would simply blame it on the past administration AND clamor for more spending on "green" energy projects..ya know, the kinda stupidity that led to the assortment of "Solydra's" that seem to unsurface rather frequently.

    And GM would really ratchet up the marketing for the Chevy Volt...

    And the federal gasoline tax would take a bigger piece of the pie...

    Both parties seem to have crony interests that favor higher oil prices.
  8. There was a time back in early 2000 when gas prices spiked significantly, albeit briefly (right around the beginning of the end for Enron). Anyhow, the public outcry was tremendous and alot of city/states suspended their share of the gas tax for several months. Of course, we were coming off of $10/bbl oil in late 1998, so it was understandable that a near doubling in price would cause some consternation.

    Now, some 12 years later, we've been "conditioned" for $100/bbl oil. I say this because when we first crossed these levels during the months prior to the credit collapse, people were screaming bloody murder about it. It was a huge political issue at the time and, dare I say, the Fed was more attuned to the inflationary aspects of high oil prices...

    Now, look at the situation. The Bernank has already painted himself in a box with the extension of ZIRP thru 2014. They've completely abandoned any and credibility that they will be pro-active in adjusting rates (like he said in that 60 Minutes interview). Oil could go up to $200/bbl and I suppose he'd sit there and lie straightfaced that there is still "no inflation", etc, etc...

    btw, I don't know if you saw the graph of gasoline consumption...but it's a truly phenomenal picture of how demand has literally fallen off a cliff and yet prices continue to rise unabated. It lends far more credence to the theory that the rise in price is completely linked to monetary easing.
  9. how many times do I have to tell you, energy and food prices are not included in the CPI for a very good reason. Do you want the FED to raise rates everytime war breaks out in the middle east or there is a drought?

    If oil stays high or goes higher, then it will gradually be reflected in the CPI. And that's when it becomes a cause for concern to the fed.
    #10     Feb 18, 2012