Oil bulls run as UN votes for Libyan no-fly zone


Of one kind or the other! The UN finally decided to intervene just as it seemed that Gadhafi was on the verge of crushing the rebellion! The G-7 also intervened in an effort to try to break the runaway Japanese yen as the country continues to battle a nuclear nightmare. Now China intervenes against soaring food and energy costs as it raises bank reserve requirements.

Oil prices shot up as the UN finally showed some backbone as it voted to establish a "No-Fly Zone" before the Mad Dog of Libya could slaughter his opposition. Weeks ago it appeared Gahdafi was on the ropes when he was hunkered down in his last stronghold in Libya. The terrorist then turned the tide as the world sat on its hand and only decided to act before it was too late. Hopefully it is not. Of course war in Libya increases the risks for oil, a risk partly priced but partly not.

The real risk may be if Libya follows through on some of the threats of Libya's Defense Minister who said as reported by Reuter's, "Any foreign act against Libya will endanger air and maritime traffic in the Mediterranean. Libya will hit civilian and military targets in response to any foreign attack and that it will expose the Mediterranean Basin to short and long term risk."

So what he is saying is that Libya is now an official terror state. Now it is out in the open. They will kill civilians (like they have done before) and now that is policy. We have to take the threat seriously because of Libya's cowardly track record. This murderous regime that targets commercial airlines must be taken seriously. Expect a scorched earth policy as Gadhafi and his regime go.

So perhaps the critics of speculation are finally starting to get it. The risk to supply is high as the market was signaling all along. Instead of whining about what the market is telling us and blaming speculators or the boogey man perhaps it is time you listened to what the market is saying!

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