Get ready for crude futures DOUBLE overnight in 2009. I just don't know on which day. Feb 28, 2009 www.newsweek.com/id/186982 Iran now has enough low-enriched uranium to make one atomic bomb¡ªat least theoretically. Independent analysts say that became clear after the U.N.'s International Atomic Energy Agency issued its latest inspection report on Feb. 19, revealing the presence of 1,010 kilograms of the material Washington and the Europeans hoped would never exist. It's a grim milestone on the road to nuclear perdition; but, then, Iran has passed so many of those in the last five years. And many, like this one, were not quite as dramatic as initial reports implied. U.N. inspectors quickly downplayed stories that they'd not only underestimated the quantities in earlier reports, but they might even have been deceived. Sources close to the IAEA also suggested that it would take about 50 percent more of the low-enriched stuff to process enough high-enriched stuff to make a bomb (a target that could be reached later this year). And in any case, the threat is hypothetical: the potential fuel for one device does not a nuclear power make. The question of whether Tehran moves to arm itself with nukes today, tomorrow, next year, next decade or ever remains open. Indeed, the Iranians say they have no such intentions; they're processing the uranium for future power plants like the one at Bushehr that was fired up in a trial run last week. Is there any red line Iran may hesitate to cross? The last big one¡ªso big it could start a war¡ªis what's known as "breakout": effectively renouncing the Nuclear Non-Proliferation Treaty to which Iran is a signatory, halting U.N. inspections and opening the way for a full-bore nuclear-weapons program. What Iran has now achieved, says former inspector David Albright, of the Institute for Science and International Security, is "breakout capability." Perhaps that's all Iran really wants: enough mastery of enrichment to keep the world guessing about its nuclear defenses without provoking massive retaliation. IAEA Director-general Mohamed ElBaradei tends toward this view. But as Albright says, "We just don't know ¡_ I think people should be worried." Already, Iran has curtailed its cooperation with the IAEA, making it much harder for inspectors to uncover any secret facilities. And it has yet to give a convincing explanation about evidence that it was running a secret program in the past specifically designed to create nukes. A 2007 American National Intelligence Estimate concluded Iran had stopped that program in 2003, but there is no guarantee it hasn't cranked it up again. So what should Europe and the U.S. do? Obama's team has yet to articulate policy in detail, but the likely emphasis will be on talk¡ªeven as it tries to tighten sanctions on Tehran. Iran's economy has become much more vulnerable as oil prices plunge. Albright thinks gasoline supplies should be cut off to a country that, while it produces a great deal of crude, has almost no refining capacity. A process of dialogue may be long and frustrating, but the bottom line is now measurable: 1,010 kilograms of failure.
I'm not expert on oil, but I do follow Iran news, since I was born there. Seems to me a significant part of the decline in oil prices can be credited to the Obama win, or when it was shown in the polls that Obama would be the likely winner. Obama is seen as less likely to war with Iran. I think chance of US Iran war has dramatically reduced. Recently Iran became the 8th country to independently build and put in space a satellite. A new scientist article said this rocket is a more advanced rocket than was previously believed Iran could produce. This space launch shows that Iran is close to mastering Inter Continental Ballistic Missile technology, which is a deterent of war against Iran, regardless of what US administration is in power. The other major threat to Iran is Israel. But if Iran has 1 or 2 nukes then it would be a big deterent againt Israel since it is a small country, and Iran's current missiles are able to reach Israel and are also able to carry nuclear payload. Ofcourse nuclear war is highly unlikely IMO. For Israel to attack Iran it would be at a great disadvantage because of it's size and because Iran has allies bordering Israel, and Iran does have a formidable conventional force. And for some reason, Israel and Bush administration both were detered from attacking Iran. So in my opinion, the chances of geopolitical factors causing a rise in oil prices have been significantly reduced. But if there is another war between Israel and Hizbollah I would expect oil prices to rise because Iran is allied with Hizbollah. But regardig the OP's assertion that the nuclear news is bullish for oil I must say that perhpas it is bearish due to it's deterence. However, OP may be right that it is bullish news to some degree, the theory being that now Iran is a stronger regional power, so strong that the other OPEC members will be less scared of America and more likely to adopt a bullish attitude in OPEC with Iran's backing. Again, I'm not oil expert, but seems to me Iran tends to be bullish, whiles Saudis tend to be bearish. I would think this is because Saudis do not have a strong military, and are a weak government domestically as well, so they may fear they will be toppled if they don't have America as their allie. Just some thoughts. Don't want this to be a political debate, and I will not respond to any comments that take it in that direction.
==================== A-Trader/counter-trend; Sounds about right,[UGA, DXO also] but that's a counter-Trend chart; could easily get cut in half, or cut ANOTHER 77 %/+ Olive oil[Italy, Israel, Argentina, America, Spain] is sideways trend; but very low prices @ $3.99 per 17 fluid ounces/500mliters Mr Buffet selling his COP; but looks like T Boone Pickens is right / long term huge upside to oil & gas. Olive oil. is some what unique, food & fuel . Olive oil can also be used[private trade] for fuel or popcorn flavor. But Browning gun oil smells great also [texas tea/Brent based]
You can't be serious. Ever heard of the GLOBAL economy imploding? Demand for crude getting crushed? Why do you think that the NYMEX futures have traded at such steep contango the last several months, until recently paring that gap? Plenty of crude, and demand imploding. And you think that this significant decline is the result of Obama's perceived "dovish" attitude towards Iran? I'm sorry, but you really need to take a basic Econ course.
Thanks. I could use lessons in Economics. But with all due respect, I think you need a course in vocabulary. I'm aware of demand destruction and did not say this significant decline is the result of Obama's perceived "dovish" attitude as your assert. I said A SIGNIFICANT PART OF THIS DECLINE can be credited to the Obama victory. Thus, I asserted that Obama was a significant factor in the decline of oil. I did not say he was the only factor or the strongest factor in oil's decline. Perhaps Obama's strong campaign and victory was not a significant factor in the decline of oil prices. I don't know. People sold oil based on their own needs and views, and I don't know what goes through all their minds. But since the likelihood of confrontation with Iran was widely believed to be priced in in oil's rise, then a decrase in the likelihood of confrontation with Iran coincinding with oil's decline is significant.
Learn to read the facts before talking up a trade. 1,010 kg of LEU is barely enough to make one single very poor yielding nuclear device, one that is of less yield than the one North Korea tested. The lower the enrichment, the bigger the device has to be, that means this one device would have to be about the size of a small apartment, something you wouldn't be able to put on a missle. The world is not safer with Iran getting the bomb, but neither is the world safer with Israel having 200 deliverable nuclear warheads. Neither of these two facts will appreciably affect the balance of power in the middle east. http://en.wikipedia.org/wiki/Enriched_uranium