Japan to the Rescue!
No they are not fixing the Alaskan pipeline, but they are trying to fix Europe. While the market continues to fret about the systemic risks in Europe, overnight Japan seemed to try to give us a lift. Reuters News reported that Japan promised to buy euro zone bonds this month in a show of support for Europe's struggle with a seething debt crisis.
At the same time, Portugal continued to try and not take a bailout. Finance Minister Fernando Teixeira dos Santos said Portugal was doing everything it could to avoid a humiliating EU-IMF financial rescue, already granted to Greece and Ireland. "We are seeking to avoid this possibility," Finance Minister Fernando Teixeira dos Santos told TSF radio. "We are doing our work. Clearly, Europe is not doing its work to guarantee the stability of the euro."
However, a Portuguese central bank board member, Teodora Cardoso, was quoted as saying Lisbon would do better to seek international financing, breaking ranks with political leaders.
Still there are warnings from leaders in Europe that the problems may spread. This show down over debt may impact oil trade even more than that leaky pipeline. If we see a flight to quality in the dollar then look for oil to sell off. Remember the biggest sell offs last year were always on euro debt problems. On the other hand, if Japan moves eases concerns then that might be bullish for oil.
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 email@example.com.