I just got off a conference call with financial market experts hosted by Morgan Stanley. Several global financial experts were on the call. Here are my notes:
> Japan: The country is well prepared and has a long history of rapid recovery from disasters. Assuming they do not have a major nuclear explosion or radiation leak, the country will recover quickly. LT the recovery effort is a plus for the global economic recovery and bullish for all commodities.
> North Africa:
--- U.S., UK and France will impose a no-fly zone over Libya within 48 hours. France is likely to lead air strikes against Libyian government this weekend. This could cause oil price to spike.
--- Things are settling down in Egypt and Tunisa (bullish for TGA)
--- Oil prices should stay "range bound" in the $95 to $110 range as long as violence does not spread to Algeria (unlikely)
--- Oil prices were trending higher before all this started and they will continue to do so. Supply / Demand is the real driving force.
> Middle East:
--- Protests and violence in Bahrain could be a "spark" for conflict between Saudi and Iran. The panel sees a 20% to 30% chance of this happening.
--- Saudi has a large and loyal security force (plus a small population) so what is going on in Libya is very unlikely in Saudi. Very little chance of a oil supply disruption from domestic protests.
--- Major Saudi / Iran is another issue. If Iran uses this to start a war, then oil prices will spike and all bets are off as to how high they may go.
Japan + Middle East Unrest
Japan + Middle East Unrest
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Japan + Middle East Unrest
From Steven Leeb:
Oil and other commodities were hurt this week by expectations that reduced economic activity in Japan will result in reduced demand. But in the longer run, rebuilding Japan will add to global demand for raw materials, notably energy and metals. And the nuclear crisis in Japan raises renewed fears and questions about the use of nuclear energy around the world. Like solar, fossil fuels such as oil and natural gas inevitably will benefit. All of this is inflationary.
Meanwhile, the political chaos in the Middle East and North Africa is still with us. In Libya, Qaddafi's government and mercenary forces currently have the edge. And now the bigger worry, from an economic and oil standpoint, is the escalation of trouble in Bahrain, Saudi Arabia's neighbor. Troops from Saudi Arabia and the United Arab Emirates entered Bahrain this week, a troubling development. Saudi Arabia is the world's largest oil exporter.
Oil and other commodities were hurt this week by expectations that reduced economic activity in Japan will result in reduced demand. But in the longer run, rebuilding Japan will add to global demand for raw materials, notably energy and metals. And the nuclear crisis in Japan raises renewed fears and questions about the use of nuclear energy around the world. Like solar, fossil fuels such as oil and natural gas inevitably will benefit. All of this is inflationary.
Meanwhile, the political chaos in the Middle East and North Africa is still with us. In Libya, Qaddafi's government and mercenary forces currently have the edge. And now the bigger worry, from an economic and oil standpoint, is the escalation of trouble in Bahrain, Saudi Arabia's neighbor. Troops from Saudi Arabia and the United Arab Emirates entered Bahrain this week, a troubling development. Saudi Arabia is the world's largest oil exporter.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Japan + Middle East Unrest
UN just okayed the no fly zone and oil is already up to $103 for WTI. You were right on.
Re: Japan + Middle East Unrest
The "expert" on the CC this afternoon said that France would be the first to send jets in to attach Gadhafi's advancing military within 48 hours. - Dan
Breaking News:
The U.N. Security Council authorized a no-fly zone over Libya and called for Arab states and others to use "all necessary measures" to protect civilians from attacks by Moammar Gadhafi's forces.
The resolution passed 10-0 with five abstentions, including Russia, China, Germany, India and Brazil.
The resolution establishes “a ban on all flights in the airspace of the Libyan Arab Jamahiriya" while excluding an occupation force. It also calls for freezing the assets of the Libyan National Oil Corp. and the central bank because of links to Gadhafi.
The U.N. vote paved the way for possible international airstrikes on Gadhafi's advancing military and reflected the past week's swift reversal of the situation in Libya, where once-confident rebels are now in danger of being obliterated by an overpowering pro-Gadhafi force using rockets, artillery, tanks, warplanes. That force has advanced along the Mediterranean coast aiming to recapture the rebel-held eastern half of Libya.
Speaking to reporters in Tripoli after the vote, Libyan Deputy Foreign Minister Khalid Kaim took a conciliatory tone, offering to negotiate a cease-fire with the rebels. He welcomed the Security Council's endorsement of the territorial unity of Libya and concern for its citizens, but called on the world not to allow them to receive weapons. because "if any countries do that, they will be inviting Libyans to kill each other."
French Foreign Minister Alain Juppe flew to New York Thursday to press the case for speedy Security Council approval.
Breaking News:
The U.N. Security Council authorized a no-fly zone over Libya and called for Arab states and others to use "all necessary measures" to protect civilians from attacks by Moammar Gadhafi's forces.
The resolution passed 10-0 with five abstentions, including Russia, China, Germany, India and Brazil.
The resolution establishes “a ban on all flights in the airspace of the Libyan Arab Jamahiriya" while excluding an occupation force. It also calls for freezing the assets of the Libyan National Oil Corp. and the central bank because of links to Gadhafi.
The U.N. vote paved the way for possible international airstrikes on Gadhafi's advancing military and reflected the past week's swift reversal of the situation in Libya, where once-confident rebels are now in danger of being obliterated by an overpowering pro-Gadhafi force using rockets, artillery, tanks, warplanes. That force has advanced along the Mediterranean coast aiming to recapture the rebel-held eastern half of Libya.
Speaking to reporters in Tripoli after the vote, Libyan Deputy Foreign Minister Khalid Kaim took a conciliatory tone, offering to negotiate a cease-fire with the rebels. He welcomed the Security Council's endorsement of the territorial unity of Libya and concern for its citizens, but called on the world not to allow them to receive weapons. because "if any countries do that, they will be inviting Libyans to kill each other."
French Foreign Minister Alain Juppe flew to New York Thursday to press the case for speedy Security Council approval.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group