NOTE: The rest of the Middle East story is below this short note: check out the Three Forks Sanish well [link broken/removed] that produced 45,000 barrels in the first two months of production. January 31, 2010.The price of oil has been dropping quite rapidly in the past few days, and was down another $1.75/barrel over the weekend when most of us weren't watching. But now I noted the fall has stopped (temporarily?) and the price is starting to recover.
Coincidentally, I note the international headline: the US is sending a missile shield into the Middle East to protect against Iranian nuclear missiles. "Everyone" says the Iranians are years away from being able to put a nuclear warhead on a missile, so this seems a bit premature.
My hunch: this has nothing to do with nuclear warheads on Iranian missiles. Rather, it's a a show of force by the current administration for the American electorate consumption; and it's a military show of force to show Iran that "we" are serious about new Iranian sanctions.
So, if the missile shield stabilizes the Mideast, the price of oil will continue to fall, all things being equal. If the missile shield raises the stakes (induces Iran to do something interesting), the price of oil will rise, all things being equal.
I have my hunch which way the price of oil is going to go.
UPDATE: Maybe I'm completely wrong. A couple of data points: Obama is very, very slow to make a decision -- how long did he deliberate on decision to send more troops to Afghanistan? But this decision to move a missile shield to the Middle East seems to have happened "overnight." And now, the Drudge Report links to a story reporting that Iran will "deliver a telling blow to global powers on February 11, 2010." I think my hunch is right -- on which way the price of oil is going to go. (I am unable to link that site; their server is overloaded.) 10:29 p.m. EST, January 31, 2010.
UPDATE: finally at 10:30 p.m. EST, January 31, 2010, after many trials I was finally able to link to the story. The story suggests it will simply be a political rally. False alarm. Sorry. For those unable to link because the server is too busy, it sounds like Ahmadinejad is simply predicting the biggest Iranian political rally ever when Iranians pour onto the streets to celebrate the anniversary of "their revolution" on February 11. Nothing more than that. At least that's what the story suggests. If you can't get to the story (because the "server is busy"), you are not missing much.
