The Great Commodity Comeback
They're back! Oil prices are flying as commodities rise from the dead. Across the board traders seem to be daring to take a risk as economic optimism comes storming back. What does it take to inspire confidence! Oh, I guess some better than expected earnings and a plan to save CIT (without the government's help). Commodities are king for the moment as hope springs eternal on the eve of the August crude contract expiration.
Oil also got a boost on the unwinding situation in Iran. There is ongoing conflict over last month's disputed presidential election result, which was supposedly won by Mahmoud Ahmadinejad but many believe the whole election was just a fraud. The Supreme Leader Ayatollah Ali Khamenei is not nearly as supreme as he once was. In fact other top Iranian leaders are questioning his supreme capabilities in what could be one of the most shocking supreme break ups since Diana Ross left the Supremes.
On Friday Iranian cleric Ayatollah Ali Akbar Hashemi Rafsanjani delivered a prayer sermon and criticized the Iranian government. He called for the release of all the protestors and demonstrators that were jailed. He said that, “Our important issue is that the trust that brought so many people to the polls and is now harmed will be restored. This should be our holy objective, that this trust is returned.”
Now the Former President of Iran, Mohammad Khatami has called for a referendum on the legitimacy of the government. The BBC reports that Khatami on his Website said millions of Iranians had lost faith in the electoral process. This of course has not made Iran’s Supreme Leader and Grand Pooh Bah none too pleased and he is warning "the country's opposition against provoking further unrest and decried foreign interference." It's not the foreign interference that his supreme backside should be worried about.
Oil traders seem to finally taking some interest in the unfolding events. They have basically ignored these types of geo-political pressure points yet in the back drop of increased economic optimism they may garner a second look.
Phil Flynn is vice president of Alaron Trading and a Fox Business Network contributor. He can be reached at (800) 935-6487 or pflynn@alaron.com .
