Oil prices are starting to pullback as the situation in Italy goes from bad to worse. The Italian bond yield curve has gone inverted suggesting that the recent Italian Prime Minister Berlusconi show has taken away Italian confidence and could drive the country into a recession. While Berlusconi is promising to go, somehow that is not giving the market the same solace that it seemed to yesterday. Yesterday Iran fears helped drive the market higher, but today it is the concern of economic slowing and the fear of contagion. Maybe it’s because the market is not convinced that the bombing of Iran will happen anytime soon. That makes the news on Chinese inflation data sort of a double edge sword. Yes China inflation hit a five-month low and that will allow China some slack to stimulate the economy. Yet at the same time the Chinese economy might be slowing reflecting a great European recession .
President Obama’s five year plan for offshore drilling is a five year plan to economic disaster. President Obama is trying to provide political cover for his politically motivated drilling moratorium that has cost this nation thousands of good paying jobs and has intensified the impact of the recession across the south. He is now proposing a five-year plan to open up six areas for oil and gas drilling, including unleased portions of the Gulf of Mexico and along Alaska's coast, which they say is a cautious approach that "will help us continue to reduce our dependence on foreign oil and create jobs here at home."
The problem is that it is too little too late. The Interior Department is proposing just 15 potential lease sales in 2012-2017, with five annual lease sales in the western Gulf beginning next fall, and lease sales in the central Gulf starting in spring 2013. According to reports, two of the lease sales will be held in 2014 and 2016 for tracts in the eastern Gulf. Those that are not currently under a congressionally-mandated leasing moratorium, set to expire in 2022, and three more sales would be scheduled in "frontier areas" off Alaska's coast, including the Beaufort and Chukchi seas, and the Cook Inlet.
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.