Brent/WTI Crude Oil Spread – Complacency or Just Fundamentals??

Brent - WTI Crude Oil Spread May 2013

 

COMPLACENCY OR JUST FUNDAMENTALS??

  • Greatest risk level since early 2011 to sudden spread widening due to real or perceived supply disruption/ headline risk.
  • Supply/demand fundamentals continue to pressure the WTI/Brent spread lower towards the long term average of +/- $5.
  • As North American production continues to increase and replace imported oil increasingly the WTI/Brent spread will reflect and be contained to Brent oil price swings.
  • OPEC continues to reduce production, $90 per barrel price acceptable to OPEC and OPEC expects increase in demand from improving economies in the second half of the year. Continue reading

The Coming Civil War That Could Have Been Avoided

I wrote the following Op-Ed piece in the fall of 2011 while the US was negotiating with the Maliki Government of Iraq regarding the future status of any remaining US troops in Iraq after the previously agreed upon December 31, 2011 deadline for all troops to be out of Iraq. I reprint here because of the deteriorating situation in Iraq and the recent response by the Maliki government to a protest in Hawija in the Kirkuk Province. The response turned violent and 33 people were killed. Afterward the local tribal leaders’ comments were to the effect that peaceful demonstrations are over and it is time to pick up arms. That particular clash was Shia on Sunni. However, having taken place in Kirkuk is significant.

I lived in Kirkuk for three years as the senior economic development advisor with the Kirkuk Provincial Reconstruction Team (PRT) and to the Government of Iraq. Over the three year period my team and I engaged in over 600 missions outside the wire to meet with provincial political leaders, Baghdad ministerial leaders, the Governor, and local farmers and business leaders. In Iraq, PRTs were diplomatic outposts of the U.S. Embassy that partnered with Brigade Combat Teams, other U.S. Agency presence in Iraq, and the local provincial governments to foster political progress and build capacity critical for a stable and democratic Iraq. In the disputed province of Kirkuk we were welcomed and the local ethnic groups recognized the positive contributions and the stabilizing influence of the PRT and the U.S. Army.

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Harvard’s Stephen Walt waltzed past the facts in his “Top 10 Lessons of the Iraq War”

Harvard Professor Stephen M. Walt’s March 20, 2012 article in Foreign Policy Magazine reflects yet another example of the bash America liberal elite this time in a superficial attempt at describing the “Top 10 Lessons of the Iraq War,” without regard, of course, for the realities on the ground.. http://atfp.co/1TlspN4

It is far too early to declare whether the US won or lost in Iraq. Yet Harvard Professor Stephan Walt contends in his Lesson #1: The United States lost. It’s true after countless interviews and interrogations of high level Iraqi officials, including Saddam Hussein; there was no resurgence of a WMD program in Iraq. US intelligence agencies weren’t the only ones with “definitive” evidence of WMDs: Israelis, Italians, French, and British all purportedly had independent intelligence supporting a restart of a threatening WMD program in Iraq. Saddam Hussein proved quite effective in his efforts to mislead the West about his WMD intentions and capabilities.

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Is Israel telegraphing to the world an imminent move against Iranian nuclear facilities? Oil traders think so!

The ratcheting up of rhetoric by Israeli officials focused on Iranian nuclear ambitions has culminated in recent weeks with an Israeli military official describing the threat to Israel as greater than the threat they faced during the run up to the Six day War, and the Aug 6 op-ed piece in the WSJ by Michael Oren, Israeli Ambassador to the US, stating that the window for effective action against Iran is narrowing quickly. The importance of Amb Oren’s comments is that an Israeli official is placing a time frame for Israeli/Western response.

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