Oil prices are down a bit after trading up close to $127 a barrel yesterday on fears that production cuts could be coming out of oil rich Iran.

While the chatter out of Iran could be just that, idle chatter, there was still enough of a reason to spook investors into pushing crude oil up significantly Tuesday, leading to a closing price last night of a pretty remarkable $125.80. Prices hit a high Tuesday of $126.98.

One of the main factors that has led to the current record high prices is the weak U.S. dollar. Yesterday, the dollar actually rose a bit, but traders looked past that data and instead decided that any sort of production cut rumors coming out of Iran warranted more attention.

The Feds are looking into whether drug money was laundered by Wachovia (NYSE: WB). The investigation is "part of a broad probe of alleged laundering of drug proceeds by Mexican and Colombian money-transfer companies," according to The Wall Street Journal (subscription required).

Several companies with accounts that have been seized claim to be legitimate businesses and that if they cannot get at their funds, they may go out of business.

The open question is whether Wachovia employees knew about the transactions.

It is hard to imagine a well-run bank like Wachovia would be involved in such blatant aid to drug operations from outside the U.S. Perhaps that is why its shares are down almost 50% this year.

Douglas A. McIntyre is an editor at 247wallst.com.

AP reports that Goldman Sachs Group (NYSE: GS) predicts that the price of a barrel of oil could climb from its current $120 to as high as $200. That's not too much of a stretch because since January 2001, that price has risen 400% from $24. A rise to $200 would be a mere 67% increase from the current price. Meanwhile gasoline is likely to hit $4 a gallon this summer -- and if oil hit $200 a barrel, that could drive the price to $6.67 a gallon -- up 319% from the $1.59 it cost back in January 2001.

Why is the price of oil going up so much? Experts don't seem to know and I'm not an expert. But it looks like simple supply and demand does not explain such a rapid price rise. Some cite rising energy demand -- from China and India -- combined with a reduction in supply -- e.g., production declines in Mexico, an unstable oil industry in Venezuela and possible shrinking production capacity in the Middle East -- as a partial explanation.

But then there are the other factors that seem hard to measure -- the potential decline in the dollar, political instability (such as the U.S. firing warning shots at two Iranian boats in the Persian Gulf this week), and so-called speculators. Of all these factors, the speculators explanation is the most interesting. These could be hedge funds and commodities traders who borrow huge amounts of money to bid up oil prices.

Oil prices have once again hit new highs today, trading up all the way to $118.05, before cooling off slightly, and are currently sitting at $117.85.

The main concern fueling today's move is over supplies from some of the world's major oil producing countries. Nigeria is on the list, as a joint venture of Royal Dutch Shell PLC (NYSE: RDS) stated that it would be reducing its output in April and May by around 169,000 barrels a day. This comes in response to a militant attack on one its pipelines last week.

This is really nothing new to Nigeria, which over the past two years has been the victim of multiple attacks on its oil infrastructure. The country is a major supplier to the the United States, and over the past 2 years the country has seen its oil output fall by a pretty hefty 25%. All the result of militant attacks.

Oil surged over $113 per barrel Tuesday on word of supply disruptions in Nigeria and Mexico and increasing fuel demand in China, Bloomberg News reported Tuesday.

Oil increased $1.90 to $113.66 per barrel Tuesday morning after Mexico, the third largest supplier of oil to the United States, shut its fourth export terminal Monday, while Eni SpA halted output in Nigeria, Bloomberg New reported. Meanwhile, China, which boasts world's fastest-growing major economy, said diesel oil imports increased 49% in March 2008.

The other major energy commodities also vaulted ahead on the news in early trading Tuesday. Heating oil jumped 3 cents to $3.25 per gallon, unleaded gasoline added 2 cents to $2.84 per gallon, and natural gas added about 14 cents to $10.20 per million BTUs.

Supply disruptions jolt market

Independent energy trader Jim Dietz told BloggingStocks Tuesday the supply disruptions in Mexico and Nigeria were negative datapoints the oil market did not need.

Now that it is clear that Wal-Mart's (NYSE:WMT) international operations are growing much faster than its US division, the company is searching for new frontiers. Revenue overseas is growing at a rate better than 20%

Wal-Mart has had trouble in some countries. Its operation in Japan continues to loss money and it has pulled out of Korea and Germany.

Now, the world's largest retailer is looking to Russia and eastern Europe for more growth. According to the FT, Wal-Mart "firmly signaled its intention to expand into Russia and eastern Europe, announcing that it had recruited Stephan Fanderl, a German retail executive, to explore opportunities in the region."

It will be at least a couple of years before the market can gauge whether Wal-Mart can have success in the region. It has to compete with other companies like big European retail chain Tesco. The Wal-Mart model clearly does not work in all cultures.

A break-down of Wal-Mat's track record overseas is telling. It problems in Germany, Japan, and Korea have been more than off-set by successes in China and Mexico. To some extent that may mean that countries with lower median incomes are better markets for the company. Russia and Eastern Europe are a mixed bag. Parts of Russia have done very well financially. Eastern Europe is still in a stage of economic development.

Wal-Mart may be expanding outside the US, but its success is hardly assured.

Douglas A. McIntyre is an editor at 247wallst.com.

Oil prices have set a new record today, trading through the previous record of $111.80 and moving as high as $112.21 in reaction to this week's inventory report.

As Joseph Lazzaro discussed earlier, today's move has been in reaction to this week's inventory report out of the Energy Department earlier today that showed both oil and gasoline inventories dropped unexpectedly last week. Analysts had been looking to see oil inventories swell by 2.3 millions, but the report actually showed that inventories dropped by a massive 3.15 million barrels.

Gasoline inventories also fell more than expected last week (3.4 million barrels, as opposed to the 2.3 million analysts were expecting to see) which will only apply more upwards price pressure gasoline prices. Gasoline prices are predicted to move up close to $3.60 a gallon by the middle of the summer, while some analysts are already predicting to see them creep even higher, possibly up close to $4 a gallon.

Overnight, the national average set yet another new record, climbing 1.2 cents to $3.343.

If you are sitting at home and hoping to see some relief at the pumps, I would not hold my breath. It looks like we are in for a long, expensive summer when it comes to filling up our tanks at the gas station.

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.

Rice, a staple food for about 3 billion people, is becoming a precious commodity as a result of rising demand -- a reality that's prompting some agriculture watchers to ask whether global grain producers will be able to keep the world adequately supplied amid solid emerging market economic growth.

China, Egypt, Vietnam, and India, which represent about one-third of global rice exports, curbed sales this year, and Indonesia did so as well, Bloomberg News reported Monday. Grain and food demand is increasing at above-trend rates due to solid economic growth in emerging markets. These regions are experiencing expanding middle classes -- a factor that historically has almost always led to rising per capita food consumption in the country where the growth occurred.

As a result, the price of rice and other commodities has soared -- rice hit $21 per 100 pounds on Monday, Bloomberg News reported -- and governments may face increased social unrest, given the pivotal role rice plays in many developing nations.

Validea is a fascinating newsletter that assesses stocks based on the known criteria of "legendary" stock investors, such as Warren Buffett and Peter Lynch.

Here, editor John Reese reviews Telefonica (NYSE: TEF) -- a Spain-based telecom firm with operates in Europe and Latin America -- based on the strategy of quantitative analyst James O'Shaughnessy.

"James O'Shaughnessy has noted that 'disciplined implementation of active strategies is the key to performance.' He should know; his study of 44 years of stock market data is one of the most extensive ever of the market.

"The system he devised based on that research produced average back-tested returns of 22% per year for those 44 years. At times like these, it's more important than ever to heed his advice, and keep your emotions in check by focusing on fundamentals.

"Telefonica (NYSE: TEF), based in Madrid, Telefonica is involved in the communications, information, and entertainment arenas in Europe, Africa, and Latin America. The firm has a presence in more than 20 countries and more than 218 million customers.

"I think an excellent way to profit from higher silver prices is to buy Silver Standard Resources (NASDAQ: SSRI)," says Jim Powell in Growth Stock Alert. Here's his new buy.

"Unlike gold mining companies, of which there are dozens, there are only five major publicly-traded silver producers. The limited number of investment options concentrates Wall Street's interest when silver is hot, and can send prices sharply up.

"Silver Standard controls the world's largest published in-ground silver resources of any publicly-traded silver company. The company has properties in Argentina, Mexico, Chile, Peru, Canada, the U.S. and Australia. All
properties have either been purchased (a rarity in the mining industry) or optioned at a fraction of the current
silver price.

"In an industry where most silver is found as a by-product from mining other metals, it is also significant that the company's output is approximately 72% silver. The remaining metals produced are gold, tin, zinc, copper and lead - none of which is more than 8% of the total output.

"Silver Standard's status as a pure-play further concentrates interest in the company when silver is in the spotlight. Silver Standard is also leveraged by the high cost of extracting the metal.

"Once silver prices cross the breakeven point, nearly every dollar goes to profits. Silver Standard must be considered speculative. But if you are willing to accept the risk, and a probable roller coaster ride, the stock could be very rewarding."

Each day, Steven Halpern's TheStockAdvisors.com offers the latest market commentary and favorite investment ideas from the nation's leading financial newsletter advisors.

In an attempt to explain his position regarding trade, Democratic presidential front-runner Barack Obama said that he did not oppose free trade, despite making increasingly critical comments about multilateral deals such as NAFTA.

Asked how other countries should interpret his position, Obama responded that he supported free trade but wanted it to be fair.

"What the world should interpret is my consistent position, which is I believe in trade," he said after meeting with workers at a manufacturing plant in Ohio.

"I just want to make sure that the rules of the road apply to everybody and they are fair and that they reflect the interests of workers and not just corporate profits."

Well why, Senator Obama, do companies want to engage in trade? The answer is because both sides feel that they can gain from the deal. Corporations engage in trade to profit. Period. Entrepreneurs start companies because they think they can make a buck. On the other side, poorer countries want to trade to help create wealth.

With news the embattled mortgage lender Northern Rock is being nationalized by the British government, until it can find a buyer, the question arises whether this is a good move or not?

Analysts at Bear Stearns said that the government's move is positive for the sector. The expected managed decline in the Northern Rock balance sheet should create less competitive mortgage market conditions," said analyst Robert Sage.

Who is this positive for? Certainly not the consumer. Competitive mortgage markets are the best thing that can happen to a consumer. Why should the consumer have to pay higher mortgage rates? Does this analyst think that the government setting mortgage rates is helpful in anyway? Let's not forget that the banks are responsible for this whole mess. Had they actually been careful in their lending practices, we wouldn't be in the mess we are currently in.

The choppy/consolidating (or perhaps worse) market conditions sometimes give the impression that growth plays do not exist, but that is not the case, and one growth company worth reviewing is American Movil SA.

American Movil S.A.B de C.V. (ADR) (NYSE: AMX) is the largest wireless service provider in Latin America, and one of the 10 largest in the world.

Analysts see 2008 revenue rising of 15-20%, after a 32% increase in 2007. Further, analysts also like the company's successful expansion to 13 other markets in the region, to go along with its two key markets: Brazil and Mexico.

Hence, analysts also really like AMX's current subscriber base -- a remarkable 153 million in 2007 -- and its projected subscriber growth rate of 12-15% for 2008, and 10-13% for 2009.

Grupo Aeroportuario del Pacifico (NYSE: PAC) owns a valuable 50-year concession to operate 12 airports in Mexico, mainly along the Pacific coast and in the central region of the country. This includes major markets like Guadalajara, Tijuana, Los Cabos and Puerto Vallarta.

The company makes money in two ways. One is by charging simple per passenger fees that are regulated by the government -- the more traffic that flows through PAC's airports, the more revenues it receives. In addition, the company manages some airport-related services, such as operating parking lots and leasing space to retail outlets.

When analyzing this stock, the key number to watch for is growth in traffic through its airports. The higher traffic is, the more PAC receives in take-off and landing fees. In addition, higher traffic benefits retailers at the airport, translating into the potential for higher sales.

PAC announced that its December passenger traffic was up a solid 11.1% over the same month one year ago. That growth was driven by a 16% surge in domestic air travel. Also helping traffic was the addition of another 20 routes by low-cost carriers (LCC) at PAC's airports; LCCs offer simple point-to-point air travel usually at a lower cost than traditional carriers.

The strong domestic traffic gains suggest that economic growth in Latin America has not yet been scuttled by weakness in the U.S. economy. And growth in the LCC segment should remain strong even if overall traffic growth slows since LCCs offer the cheapest ticket prices.

Trading at 17 times 2008 earnings and with a growth rate of 22%, PAC represents a cheap way to play continued strong growth in Latin America.

If you are interested in more analysis from Paul Tracy, you can find it at StreetAuthority.com

Paul Tracy owns shares of Grupo Aeroportuario del Pacific (PAC)

Wal-Mart (NYSE: WMT)'s international chief, John Menzer, is leaving the company after 12 years. Menzer will retire on March 1, leaving behind a good legacy of international expansion and growth, along with a few high-profile failures in the process.

Although Wal-Mart has done exceptionally well in Mexico recently, the world's largest retailer also failed miserably in Germany and South Korea. It exited both countries at the same time it was mulling market introductions into China and India (which it completed in 2007).

Wal-Mart CEO Lee Scott gave huge kudos to Menzer, saying, "I have seen first-hand the difference he has made ... he is probably best known for transforming Wal-Mart International into a well-organized, fast-growing and profitable business. But he is also a talented corporate strategist and I personally have found him to be a valued business counselor."

Menzer's streak in finding nuggets in the rough to allow Wal-Mart entry into many global markets was impressive. He led the acquisition of UK-based ASDA (turning out well) as well as Japan's Seiyu (not so well). Wal-Mart has said that it will divide his responsibilities into individual international businesses to achieve tighter focus, meaning Wal-Mart's growing international presence will see more autonomy than before. To ensure it can grow its business outside the U.S. (its largest market), this is most likely for the better.