Middle East Crude Oil About to Catch Fire!

By: Bari_Baig

Crude finds itself at a bid not because of the joint maritime exercises between U.S and South Korea but due to biggest tranche of documents released by Wiki Leaks. We can safely say that Middle East had this coming their way, perhaps because everyone has almost had it with the Oil’s monopoly and OPEC’s Cartel. Who then suffers the most with the latest documents released pertinent to Middle East? The Middle East itself! The recent release of secret documents carrying sinister views of variety of leaders about their neighbors appears to be an attempt to induce a paradigm shift in Iranian foreign policy for shifting their focus from USA to the foes closer at hand then as previously perceived by them.

OPEC holds 78% of the world’s proven crude oil reserves; despite the fact that non-OPEC oil production has doubled in almost 30 years regardless of that the Cartel enjoys a very firm grip on the world. Surely the western world hasn’t forgotten Crude WTI trading $145 per barrel in mid of 2008 which is a stark reminder of the foul play. It was at the discretion of the Cartel to increase the Oil production to which the Cartel turned a blind eye.

So, at first we have the Saudi King himself who days before Wiki Leak’s leaked the documents went to U.S for medical checkup. It was only today’s headlines that the Saudi King was better and walking again but the leaked documents are surely bound to weigh heavily on his old bones perhaps adding a few “knots” if not clots in his legs. The Saudi King Abdullah in his meeting with the then U.S General Petraeus stated that he had told the Americans “To chop the head off the Snake” referring to the President of Iran Ahmedinejad. It is not just the Saudi’s who have a very stern stance towards the Iranian regime but also the rest of the Middle East or should we say the Primary participants of OPEC aren’t far behind either in extending their unconditional support to the U.S for bombing of the Iranian Nuclear Facilities.

Question is why the U.S or its proxies haven’t bombed Iran as yet, when the Muslim Middle Eastern world wants Iran packed up? Could it be that such an action would lead to disruption in the Oil exports? Certainly it would but [We] do not deem it to be the “primary” reason and secondly as the consensus towards Iran is almost unanimous from the Middle East, therefore, they might have already assimilated such a [fact] into the oil prices. Of the OPEC countries, Saudi Arabia is the biggest exporter of Crude to the United States and oil exports from Saudi Arabia are on a gradual up trend which further supports the Wiki Leak’s documentation of Saudi’s giving their full support as more of their Crude is being sold. What we are trying to say here is that perhaps what might be putting a bid to Crude as of now might in the essence be a much bigger plot to push Crude prices lower and breaking the might of the Cartel! How, one may wonder? In last 30 years the Middle East has grown “Frantically” so to speak on the back of Crude Oil and they have managed to create real oases in the sands of Middle East. Now, it is these very Oases which are also being termed as “Safe Havens” and are attracting businesses from the U.S and other Western countries to move their headquarters there.

So, is Wiki Leaks an enemy of the U.S Administration or a covert ally? We believe Wiki Leaks to be of the latter category than former for one very simple reason, it helps U.S the most. Now, that Iran knows the true faces of “all” the leaders of the Middle Eastern nations it then has enemies lurking much closer to it and therefore the probability of Middle East’s outlook from being considered as peaceful and a safe haven could materially change over the course of time. U.S wouldn’t bomb the nuclear facilities of Iran for this very reason as it doesn’t destabilize the region but rather rids it of the evil and thereby making it even safer.

Turmoil always has two sides to it. As stated above this latest development may put a bid in Crude but in due course of time it actually weakens it because regional unrest would have the leaders of these nations bow ever more easily to the pressures of Western world and west has one primary agenda from Middle East and that is cheaper Oil. The so called economic hub status few of the Middle Eastern nations are currently enjoying on the back of Crude could fizzle out quickly as the media which holds the magic wand to make or break opinions dwells more and more into the possible outcome of the documents released by Wiki Leaks and in doing so, raising many flags in the subconscious brain into believing there lies uncertainty in the middle east.

We see Crude WTI breaking this consolidation phase stretching from low $80 to high $84 per barrel and embarking on a downward leg. As the events keep unfolding Crude WTI may enjoy technical support at low $80s however, we believe they shall be broken over time and Crude WTI would settle around high $72 per barrel. It may be some time before the Cartel is broken but this drive to lower Crude’s prices would certainly give the right signal to the Cartel to be ever more watchful.

By Bari Baig

http://www.marketprojection.net

© 2010 Copyright Bari Baig - All Rights Reserved
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