Behind the Crash in Crude Oil: Gary Dorsch

[teryang]

This article is a must read to understand the current state of the energy and petrodollar war - primarily directed against Iran at this point. Article says Saudi Arabia is discounting its oil prices and violating OPEC quotas to satisfy anti Iran policy objectives in cooperation with the US. The article also says there is no way there will be an Israeli attack on Iran in 2007 and produces facts to back up the opinion.

This article is jammed packed with relevant information on the forex, NYMEX, stock market connections to the strategy of isolating Iran and bringing it down.

What's Behind The Crash In Crude Oil?

By Gary Dorsch


January 10, 2007

http://www.kitco.com/ind/Dorsch/jan102007.html

However, the sudden plunge in crude oil prices to $55 per barrel, was all the more puzzling, when one considers that US commercial oil stocks had fallen from 341.1 million barrels on November 17th, to as low as 319.7 million barrel last week. The sharp drop in US oil supplies suggested that OPEC was honoring its pledge to cut output 4.3% in November, and to defend US oil prices at $60 per barrel.

While the media focused on the balmy weather to explain the sudden 10% plunge of crude oil to as low as $55 /barrel on January 5th, what initially triggered the drop was a surprise move by Saudi Arabia to slash the price of Arabian Light, its finest blend, by $1.75 /barrel to a $7.50 /barrel discount to West Texas Sweet, for its US customers, the deepest discount in 10-months.

Saudi Arabia also cut the price of Arab Light to Asian buyers by a more modest 10 cents and to European buyers by 20 cents from January. About half of the Saudi kingdom's 7 million bpd of crude exports move to Asia. But why did the Riyadh to decide to tip the delicate balance between fear and greed in the oil markets to the bearish camp, by slashing its US oil price by $1.75 / barrel on Jan 2nd?

...The Euro also gets support from some unsavory characters. Iran, the world’s fourth largest oil producer, “is calculating and receiving oil revenues based on Euros for the 2007 budget,” said government spokesman Gholamhossein Elham on Dec 18th. Most international banks have already stopped US dollar transactions with the Islamic Republic of Iran because of pressure from Washington.

Much, much more.

[Jim Warren]

1. But why did the Riyadh

to decide to tip the delicate balance between fear and greed in the oil markets to the bearish camp, by slashing its US oil price by $1.75 / barrel on Jan 2nd?

Hmmmm, lessee, when was Jim Baker last in SA?

[Porcupine]

2. Possibly failing US auto manufacterers?

Saudi Arabia relies on US buyers to purchase yet more SUV's and muscle cars in order to extort cash from them for 10 years afterward. With US light truck and SUV sales in the toilet and Detroit running in the red their gravy train is threatened.

They have to keep us happy at home or we may abandon the stupid war in Iraq. When that happens succesful Islamic revolutionaries may look remove certain families in Saudi Arabia. You bet they believe the domino theory.