Updates
May 29, 2013: OPEC disbands its production quota monitoring committee. OPEC produces much more than mandated 30 million bopd ceiling. Iraq on track to double production by 2020 (to 6.1 million bopd).
May 2, 2012: things getting tense in the Mideast:
Saudi warning Iran over island sovereignty;
Israel calling up reserves.
January 16, 2012, one hour later: gasoline shortages in Egypt.
January 16, 2012: Egypt to be led by an Islamist (as in "death to America" terrorist).
Liberals and Islamists in Egypt announced a temporary agreement Monday on a power-sharing plan that would install a Muslim Brotherhood leader as speaker of the country’s newly elected parliament.
The agreement among six political parties all but guarantees that the Muslim Brotherhood’s Freedom and Justice Party will lead Egypt’s first elected parliament since the ouster of Hosni Mubarak in February, with the Islamist party expected to control as many as half the seats.
This would be similar to voting in Louis Farrakhan as Speaker of the House as an answer to America's gridlock in Congress.
It will be interesting to see what Egypt looks like in 18 months. I hope it's a mecca for tourists, but something tells me it will be a Mecca for terrorists.
Original Post
Some data points and then a thought.
First the data points:
- WTI price of oil: jumps 9.2 percent in one day; approaching $100/barrel; this spike follows the news in Libya
- Libya: accounts for less than 1.5 million barrels of oil/day; all of it goes to Europe (Brent, not WTI)
- Libya: accounts for less than 3 percent of global production
- XOM: accounts for about 3 percent of global production
- Saudi Arabia: everyone says Saudi can easily make up the difference if Libya is down for the long term
- The Bakken: estimates are that North Dakota could produce 1 million barrels of oil/day by 2015
Comment: Someone needs to provide a reason why Europe's losing a million barrels of oil/day that can be "easily made up by Saudi Arabia" is resulting in WTI spike to $100 with projections it could go higher. It makes no sense. Unless...
It can only come down to this: a) investors/speculators bidding oil up to >$100 do not believe Saudi can produce an additional million barrels/day and get it to Europe; and/or, b) investors/speculators do not feel the "wildfire" in the Mideast can be stopped at Saudi's borders.
There really aren't any other explanations.
Tonight we learn that
Saudi has infused $36 billion into the pockets of its blue-collar workers, public service employees, the unemployed and students in an attempt to keep the peace. This amounts to a pay raise of 15 percent for some. Is that enough to keep the peace? The king of Saudi is 87 years old; he has been in power since 2005.
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I don't think it's a "bridge too far" to suggest that
Syrian and Hamas youths are frustrated they are not yet part of the action. Certainly they are following events in Tunisia, Egypt, and Libya on television and the internet. Certainly they are commenting to their friends on Facebook and other social networks.
My hunch: they are probably waiting for their military supplies off those two Iranian ships that just went through the
Suez Canal. Once those supplies are closer to Syria, they can provoke
Israel while the US is distracted by what's going on in Libya and what might go on in Saudi.
Tonight we learn that
rockets have been fired into Israel for the first time since the Gaza War.
I think some folks are making bets when that middle of the night / 3:00 a.m. phone call is gonna come in.
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On February 22, 2010, President Obama gave his "green light" speech to community organizers in the Mideast. There appears to be one exception.
Nile Gardiner of The Telegraph noted that for some reason the president is more ambivalent about removing the leader of Libya, the same man personally responsible for the Lockerbie terrorist act.