Oil Prices and Brewing Iranian Revolution

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Will's picture
Will
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Oil Prices and Brewing Iranian Revolution

I just topped off the tank on my car, and will probably go top off the diesel 4x4 today as well as fill up my gas containers.  This situation looks to me like it's going to escalate to something serious, and this can't be good for oil and gas prices.

Thoughts anyone?

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Re: Oil Prices and Brewing Iranian Revolution

Will,

There are ships anchored all over the world brimming with oil that has been held off the market. It will take quite a while for all that oil to move into the market (once it's released) - regardless of what happens in Iran. Topping off your vehicles now might save you a few cents per gallon against future price movements but you'll probably burn through it all before anything significant happens and you'll have to fill your tanks again.

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Re: Oil Prices and Brewing Iranian Revolution

Recent experience suggests that if speculators start driving up the price of oil next week due to fears of supply disruption from Iran, the price at the pump will increase almost immediately.  

Look at the rise in the price of oil over the last few weeks.  In spite of all the surplus, it's gone up tremendously.  I know part of the that is the falling dollar, but some of it is market speculation.

Also, I think Chris has indicated that in spite of all the current surplus inventory, if only one major oil exporter was suddenly shut down, that surplus oil we have stored could be gone in a very, very short time....

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Re: Oil Prices and Brewing Iranian Revolution

Basic point is still the same, Will.

You may save a couple of bucks topping off your tanks now but you're still going to have to refill them at the prevailing price - whatever it is.

History has shown that if everyone starts topping off their tanks every chance they get, it will do nothing but create gas lines and artificial shortages. Trust me - I was around during the Arab Oil Embargo in the mid-1970's.

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Re: Oil Prices and Brewing Iranian Revolution

 I understand that it is only a short term hedge if this thing really blows up, but I work from home and don't drive much so I would not be forced to pay the higher price for almost a month.  Hopefully things will have stabilized somewhat over that time and I won't be sitting in some long gas line or paying double the price.

The larger issue is that this could be a tipping point that Chris has indicated could lead to the next energy crisis and huge price spike.  Iran is the 4th largest oil exporter in the world.  Any doubts about their ability to maintain current oil production is bound to stir up the oil speculators.

I understand that everyone topping off their tanks and/or buying some reserve only compounds the problem.  However, at some point we all have to make a personal decision-- personal preservation or sacrifice.  This is exactly the point that Chris has often warned us about when the fear of scarcity takes a firm hold.

 

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Re: Oil Prices and Brewing Iranian Revolution

It probably won't hurt anything to keep the tank full but as Sam indicated it will not be of much consequence. I fully expect the price to rise but unless you can buy and store lots of gas it won't matter that much.

 

Ken

 

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Re: Oil Prices and Brewing Iranian Revolution

 It's apparent that this movement is becoming less and less about who won the election and more and more about fundamental change in Iran.  Inflation is currently running at near 30%, unemployment over 20%, 2/3 of the population is under 30 and wants to move into the modern world and away from antiquated theocratic rule.

The US Government better be paying attention, because something similar is going to take place here if the economy continues to deteriorate.  Every society has a threshold where they just can't take anymore lies and corruption while their opportunities continue to dwindle...

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Re: Oil Prices and Brewing Iranian Revolution

I second that one, Will.

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Re: Oil Prices and Brewing Iranian Revolution

How about the latest explosion in Iraq. This massive truck bomb exploded near Kirkuk in northern Iraq killing 80+ and wounding 100's. I pay close attention what happens over there because Iraq has the potential to push back a major oil crunch. By major i mean $200 oil or more. Im sure most people here know that Iraq is sitting on at least 80 billion plus barrels maybe more. Within several years Iraq could be exporting more than 7 million barrels a day, which can supplement all the currently depleting oil wells. They say that within the decade, IF the violence subsides, then Iraq could potentially export over 12 million barrels a day. Iraq's oil reserves could delay the severe crunch by several decades perhaps??

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Re: Oil Prices and Brewing Iranian Revolution

one country greatly at risk by any disruption of supply from iran is india. india has very little oil and gas of its own and its main supplier is iran. this is why i decided over a year ago that my long term plans were int ot live in india as i had planned on.

i have many irani friends and this has been brewing for a while.  the regular folks in iran have been unhappy for quite awhile with the government and actually with islam and have not been going to the mosques in the numbers they did previously. we have been getting a very slanted picture of iran from the u.s / israeli controlled media. i would suggest following developments on link tv and at english al - jazeera.

my question as always is who profits from these disruptions? and why is instability profitable anyway?

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Re: Oil Prices and Brewing Iranian Revolution
joe2baba wrote:

my question as always is who profits from these disruptions? and why is instability profitable anyway?

For some reason, I first read the headline on this thread as "Oil Prices and the Iranian Brewing Revolution"...what, beer is okay under Islam now?  When did that happen?    Wakey wakey, Sagerman!

As for why instability is profitable -- instability makes a lot of people fearful.  And frightened people are manipulated more easily.

Viva -- Sager

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Re: Oil Prices and Brewing Iranian Revolution

Recent Tweets from Iran apparently indicate that the people may be changing their strategy from public protests and direct confrontation to one of economic subversion in an effort to avoid being massacred in the streets.  Sounds like they may be encouraging everyone who is in opposition to stop paying their bills, draw all their money out of the banks, national strikes, etc.  One tweet reportedly indicated Mousavvi is going to call for a petrochemical strike as soon as tomorrow.

If this is true, the uprising in Iran could be the domino that starts us all on another big leg down on the economic front.  Oil prices dropped significantly today, but it has to spike if the their oil industry goes on strike.

I've already topped off both my vehicles with a few gallons of reserve in containers (might go get more and suck up some of that floating oil tanker storage surplus).  I don't care if doing so compounds the overall problem, it's time to switch from sacrifice to personal preservation.  I started doing more than my part to conserve gas when I bought my Honda Civic back in 1993 while everyone else raced around me in their giant gas guzzlers these past 15 years (I've continued to hypermile the Civic even as gas prices dropped below $2/gal., averaging 40mpg city).  I'll be damned if I'm going to suffer now because of the majority's lack of conservation and subsequent addiction to foreign oil imports.  I know, I know--  if the situation in Iran has a prolonged impact on oil prices, I will eventually be in the same boat as everyone else.  I'd still rather miss out on the initial huge price spike and potential lines at the gas station due to anticipated short supply.  This could be the first big scarcity tipping point that Chris has often warned us will eventually manifest itself in some manner in the emerging age of Peak Oil...

I know some of you disagree with my strategy, but part of the reason we are all here is because we are seeking ways to prepare and avoid as much of the negative fallout of greater societies misguided foolishness as possible.  It's certainly your right to not top off your tanks or stock up on some reserve, but if the price of oil blows up overnight and the general public goes on a gas buying rampage I hope you are not left high and dry...

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Re: Oil Prices and Brewing Iranian Revolution
Will wrote:

If this is true, the uprising in Iran could be the domino that starts us all on another big leg down on the economic front.  Oil prices dropped significantly today, but it has to spike if the their oil industry goes on strike.

No doubt this news was already "baked-in" to the price of oil weeks ago. (Buy the rumor, sell the news).

Simple Strategy to Hedge Against Rising Gasoline Prices.

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Re: Oil Prices and Brewing Iranian Revolution

 Thanks JAG.  The UGA ETF is a great suggestion for the long term and I'll look into it.  It won't help in the short run if there are serious shortages and gas lines, but sounds like a great way to balance my coverage for both short and long term protection.

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Re: Oil Prices and Brewing Iranian Revolution

Your welcome Will, I'm glad I could help some.

My investment in UGA is up 60% so far this year, but even though I think oil (and gas) is headed down in price for the remainder of the year, I'm not going to sell and take my profit. I want to hold it for a year before I take any distributions to offset the increased price at the pump. 

I wouldn't worry to much about how the news in Iran might affect the price of oil. I live in Houston (oil capital of the US) and last year when Hurricane Ike blew through here and damaged quite a bit of the oil infrastructure, there was a lot talk about the price of oil skyrocketing because of it. What happened? Oil kept on falling in price and didn't stop until late into the year. Some market forces are more powerful than the news. If there is a spike in oil that is related to the news, I don't see it lasting too long.

 

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Re: Oil Prices and Brewing Iranian Revolution
joe2baba wrote:

my question as always is who profits from these disruptions? and why is instability profitable anyway?

Hi Joe, 

Its good to see you around again. Where you been hiding, the Controversial Topics section again?

You know the answer to your questions, because you taught me them. The "House" always profits because instability engenders emotion and emotion causes one to make stupid decisions when they are betting (oops, I mean investing).

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Re: Oil Prices and Brewing Iranian Revolution

 CNN World just aired a report that appears to confirm that Moussavi is calling for a nationwide strike and another peaceful protest on Thursday...

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Re: Oil Prices and Brewing Iranian Revolution

"Peaceful Protest" is a rather once sided concept, isn't it?
Afterall, the difference between protest and revolution is the use of arms.

The concept in Iran might truly reflect the peoples' will. They've had a moderate, intelligent population with a fanatical government for quite a while; since the 80's if my memory serves. Their theocracy has handicapped itself in every way, and while I wouldn't be at all surprised if there were CIA agents instructing people on how to organize and mobilize activists, this may ultimately have a very positive influence on Islam and the middle east.

Regardless of the agenda, I'm glad to see Iranians taking action to get themselves out from under an outdated and puritical form of Islam.

Cheers,

Aaron

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Re: Oil Prices and Brewing Iranian Revolution
SagerXX wrote:

For some reason, I first read the headline on this thread as "Oil Prices and the Iranian Brewing Revolution"...what, beer is okay under Islam now?  When did that happen?    Wakey wakey, Sagerman! 

Make beer, not war. This should be the center piece of a UN initiative to stabilize the region.

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Re: Oil Prices and Brewing Iranian Revolution
Aaron Moyer wrote:

"Peaceful Protest" is a rather once sided concept, isn't it?
Afterall, the difference between protest and revolution is the use of arms.

The concept in Iran might truly reflect the peoples' will. They've had a moderate, intelligent population with a fanatical government for quite a while; since the 80's if my memory serves. Their theocracy has handicapped itself in every way, and while I wouldn't be at all surprised if there were CIA agents instructing people on how to organize and mobilize activists, this may ultimately have a very positive influence on Islam and the middle east.

Regardless of the agenda, I'm glad to see Iranians taking action to get themselves out from under an outdated and puritical form of Islam.

Cheers,

Aaron

The Iranians needed a powerful, revolutionary force to overthrow the shah and wrestle control of their own country back from the Anglo American axis of evil, presided over by the puppet Shah. The Shiite clerics managed the near impossible --and nothing they have done to suppress freedom since, compares to the murderous regime of the Shah. My hat's off to them. I hope that, even if the present regime is overthrown, that Islam remains dominant in the region and Islamic revolutions remain the blueprint for the way forward. As others have pointed out, Iran, though impeded in some areas, by clerical intervention of all sorts, has managed to grow a middle class, educate many women (70% of grads are women) and most importantly, outlaw rap music. Western society, on the other hand, has children listening to music that refers to women as ho's (whores), prostitutes, and etc..Western web sites attracting most viewership are pornographic. How is freedom to access popular Western culture, an actual freedom? The issue of Islam, the Western version of "freedom" is riddled with paradoxes, that we ignore at our peril.

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