The past couple of trading days it started to look as though oil had finally run out of steam and was coming back to "reasonable" levels. Well, prices are moving higher once again today following news that Iran has test-launched 9 missiles today.After heading up to $145 a barrel last week, oil had fallen nicely over the past two trading sessions, and as of last night prices were down at $136.04. Today, oil is moving up $1.63 a barrel as the market once again is facing the hard reality of an unpredictable future in the Middle East.
Iran has been all over the news over the past couple of years, and the main theme is the country's nuclear energy ambitions. The West, and Israel, have been claiming for a long time now that Iran has one goal in mind... nuclear weapons. But Iran has been defiant in its claims that it is only after nuclear energy and that its nuclear program is purely for peaceful means.
I am not going to take sides, it is up to you to decide who you believe in this debate, but one thing is for sure: the more we hear about Iran and possible nuclear weapons, the more volatility we are going to see in the price of oil. Today, things got a little more interesting after reports broke about Iran testing nine long- and medium-range missiles.
Both America and Israel have stepped up their language over the past couple of weeks regarding Iran, and Israel recently had war exercises in Greece that many believe were a test run for a possible upcoming attack on Iran's nuclear facilities.
One of the missiles that Iran tested reportedly has the potential to reach Israel, and this for sure is going to lead to higher speculation that an attack on Iran is coming in the not too distant future.
While the United States has said that it does not wish to get involved militarily with Iran, it has not ruled out the scenario either, and you have to really wonder what the likelihood of America staying on the sidelines would be should something erupt between Iran and America's strongest Middle Eastern ally, Israel.
With tensions already high, things are definitely getting sketchier by the day in the area. Just yesterday, Iran stated that it would set fire to Israel and the United States' navy in the Persian Gulf should any attack be made on its nuclear facility. This follows recent rhetoric from Iranian President Mahmoud Ahmadinejad that Israel will disappear.Just how this whole mess will work itself out is anyone's guess, but its short-term effect is crystal clear - higher oil prices.
What are your thoughts on the Iranian situation and how it would affect oil prices. Let us hear what you think on this highly explosive issue.
Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the online investment advisory service Investor's Observer.











Reader Comments (Page 1 of 1)
7-09-2008 @ 9:35AM
jon said...
If we get Oil down to $2.50 a gallon in 30 days our economy is fixed. If I remeber correctly we have about 50 years worth of oil reserves without even using most of Alaska for drilling. Start off shore drilling now and in 5 years we can put it back.
7-09-2008 @ 10:05AM
Stan said...
It absolutely time for the US to change its drillling policies. We have reserves available if we would only drill. Depending on Arab oil is foolish at best. If we go into an aggressive drilling program in a few years we could become oil independent. the price would drop significantly. at the same time we must develop reliable alternative fuels that are less expensive and renewable. Hydrogen is the most logical. It the most abundant potential fuel available that burns clean and is totally renewable.
7-09-2008 @ 3:11PM
w said...
We have to demonstrate a willingness to act in our own interest.Just declaring that we are aggressively developing our own oil reserves as well as nuclear and all alternatives will slow the price speculation.We may have to establish a "floor' for oil, for example a 1980 equivalent pricing of $90.00 a barrell $3.00 at the pump to let capitalism and themarketplace take off.Any difference in the price paid and the floor can go into tax credits to incent changing the fleet etc.
7-09-2008 @ 10:46AM
Joseph said...
If the US used its military to build windmills out in the sea of high wings then we would have enough electric to heat our homes and run electric cars. making oil obsolete!! then we don't need oil anymore regards Joseph
7-09-2008 @ 11:20AM
Kyle said...
We need to become self reliant again. Or, we could attempt to trade with, not instill fear in, other nations that could give us more oil than we could use if only we didn't play god in the middle east.
It's a sad day when Americans are duped into fear and financial depression over a nation defending herself, not even on the scale we do.
7-09-2008 @ 12:45PM
johnclrdsprn said...
Obama, would not drill for oil if president. How can this guy be taken seriously, when we are 20 or more years from benefiting from all the other alternative energy sources? My understanding is the so called climate issue in regards to drilling offshore and on the continent, is the reason. Drilling has never been cleaner or more efficient.
Coal can be gasified for half the price of middle Eastern crude, yet Obama and the Democratic party is blind to what makes total sense. They have sold their souls to a nebulous and iffy science, the yet proven man caused global warming condition.
Obama and his party is thumbing their noses at the majority of Americans demanding we become energy independent. Shameful. I thought they worked for the majority of Americans? What a do nothing, arrogant bunch!
7-09-2008 @ 1:32PM
Greg said...
Stan, you comment that: "If we go into an aggressive drilling program in a few years we could become oil independent." Are you saying this out of blind faith and uninformed hope? Or are you accessing some erroneous data. A couple hours search of mainstream reporting should be enough to convince you that there is no way on Earth that we can ever become oil independent by drilling reserves in American territory. We currently use about 21 million barrels of oil a day and produce about 8 million a day. At this time even oil-connected people: the CEO of Chevron, T. Boone Pickens (a fairly conservative man, I'm told), the IEA pronounce the death of the idea of drilling ourselves to energy independence. Tom Evslin at this site http://blog.tomevslin.com/2008/06/if-i-cant-have.html , makes the point well: we need to accept and promote any number of concurrent strategies to work our way to energy independence, and though drilling the costal areas and ANWR may be one, one will not do the trick, and none will do the trick in a few years.
7-09-2008 @ 1:37PM
Greg said...
Wow, how many off-base comments in one comments page? "Coal can be gasified for half the price of middle Eastern crude?" There is no price for middle Eastern crude except the price of oil on th eworld market. We can "gassify" coal but, if you think the lack of refinery building over the last 30 years is bad, try to finance a gassification plant. Then finance as many of them as there are current refinerys. Maybe in thirty more years. And can it be done for $70 a barrel?
Capitalism and the free market as regards a floor for the price of oil? This is an oxymoron of the first water. Government control through price floors works in Germany and much of Europe. Not much of a free market thing, though.
"If we get Oil down to $2.50 a gallon in 30 days our economy is fixed. If I remeber correctly we have about 50 years worth of oil reserves." I suppose you mean gas at $2.50 a gallon; oil at $2.50 a gallon is $105 a barrel, a great improvement, but not an economy fixer. Do you suppose oil will hit $105 by mid-August?
7-09-2008 @ 5:20PM
UTFB said...
How about taking away the ethanol subsidy that our gov gives to the U.S. makers, take away the tax on foreign ethanol imported, reverse the law mandateing that only corn be used for ethanol, and you'll knock 1.50usd off a gl of gas and reduce your food bill as well. But that's really not the point we must not bury our heads in sand thinking if we do no harm to others, they will stop lusting for our blood. Isreal would be the testing ground of Iranian missiles but the great satin the ultimate objective. So no matter what; there will be a confrontation with Iran, unless they are denutered by someone else. Yes the sabre rattleing has taken its' toll on the U.S. consumers so has refilling the strategic reserves while doing this, and giving the govn of Florida a pass on offshore drilling. How many Katrina type failures have we had were before or once upon a time, we were quite capable getting things done.