There is nothing like a big bailout to get energy traders' minds off of the dangerous world we live in. Oil prices are defying a stronger dollar as the market is rallying on the news that Europe finalized a €67.5 billion bailout of Ireland and created a plan that could have bondholders taking haircuts to help pay for their solvency.
Yet oil may also be getting a geo-political bounce as tension rise in the world, and I am not just talking about the Korean Peninsula. A revelation from Wiki Leaks may add to tensions in the Middle East and perhaps even threaten the delicate peaceful balance that sort of exits there. Reuters News reported that, "Saudi King Abdullah has repeatedly urged the United States to attack Iran's nuclear programs,” according to a vast cache of diplomatic cables released on Sunday in an embarrassing leak that undermines U.S. diplomacy. The more than 250,000 documents, given to five media groups by the whistle-blowing website Wiki Leaks, provide candid and at times critical views of foreign leaders, as well as sensitive information on terrorism and nuclear proliferation filed by U.S. diplomats, according to The New York Times.
The White House condemned the release by Wiki Leaks and said the disclosures may endanger U.S. informants abroad. It could also create tension in the OPEC cartel as Iran may try to retaliate against Saudi Arabia in some way. The Saudis already have their hands full fighting Al-Qaeda and other terrorist rightfully fear a nuclear armed state sponsor of terror like Iran. The Saudi King in the leaked memo said that the United States should, "cut off the head of the snake".
Phil Flynn is senior energy analyst for PFGBest Research and a Fox Business Network contributor. He can be reached at (800) 935-6487 or at firstname.lastname@example.org.