I am keeping an eye out for the price of oil spiking up. Not because of anything to do with the Gulf oil spill & BP. It has nothing to do with the supply & demand for oil. In fact, there is plenty of oil above and below ground. There is plenty of supply, especially with economies slowing down in most regions of the world and using less.
This is about politics. If you have been paying attention, the Israelis commandos boarded a flotilla headed to Gaza with “relief supplies” and killed approximately 10 activist
The problem is the Israelis already allow supplies (everything except terrorist & guns) to enter Gaza. So does Egypt. So why was the flotilla needed by Arab pro-Gaza activist trying to help the Palestinians in the first place? Also, the commandos actually had paintball rifles plus real sidearms and were just trying to intimidate the convoy.
Some of the activist grabbed some of the Israeli soldiers and shot them. That is when the Israelis soldiers opened fire & defended themselves. You DON’T hear that part on the mainstream media. Our military sources tell us that is exactly what happened.Now, pro-Palestinian activists said they would test Israel’s blockade of the Gaza Strip with another ship.
This coupled with the Iranian nuclear program makes the Middle East a very dangerous place. Iran’s program is coming to fruition and they will have nuclear capability along with the delivery system SOON. No one is stopping them, leaving the Israelis isolated and alone. We are sure not defending our most loyal allies.
My personal belief is that they will defend themselves and even make a proactive, pre-emptive strike against Iran. Israel has done this numerous times in the past and every time they were threatened seriously by any of the Arab countries.
If this happens, it will probably cause the Straits of Hormuz, in which 90% of the world’s oil passes & shipped through, to close down. If this happens, oil will skyrocket.
To make matters worse, Obama just announced today that he is closing ALL offshore drilling projects. All this seems to be a “perfect storm” for oil.
From a technical standpoint, oil is back where it was in 2008, in the midst of the financial crisis. I am not saying this will happen, but it is quite likely. Therefore, you should have a trade “in the shoot” ready to execute in case this scenario plays out as I have described.
Keep studying,
Dan Stewart CFA®
