Jump to navigation

Free Newsletter Modern Trader Follow

Main menu

  • Futures
    • Modern Trader Magazine
    • Commodities
    • Futures Mag Archives
    • ETFs
    • Financials
    • Forex
    • Managed Funds
    • Market Analysis
    • News
    • Options
    • Regulation
    • Technology
    • Trading Strategies
    • Education
    • Futures Op-Ed
  • Favorites
    • Alpha Pages Most Popular
    • Futures Magazine
    • Modern Trader Magazine
    • Most Popular
    • Slideshows & Lists
    • Special Topics
      • Alpha Hunters
      • Bad Boys
      • FINtech
      • High-Frequency Trading
      • Trader's Life
      • Trading Strategies
      • FUTURES MAG's 500th ISSUE
      • We asked traders
  • Traders
    • Market Data
    • Hot Charts
    • Interactive Charts
    • Trading Calendar
  • FINalternatives
  • Hard Assets
    • Home
    • Base Metals
    • Precious Metals
    • Rare Earth Metals
    • Commodities
    • Mining Investments
    • Slideshows
  • Modern Trader
    • Subscribe
    • Past Issues
  • All +
    • Follow Us +
      • FuturesMag
      • Newsletters
      • Facebook
      • Google+
      • Linkedin
      • Twitter
      • RSS Feeds
    • About Us +
      • About
      • Advertise
      • Contact
      • Contribute
      • Privacy Policy
  • !
Follow Futures          
       
more >>

We Asked Traders

We asked traders for their opinion on the launch of bitcoin futures

Sponsored Content

Trading

Equities.com launches unlimited trading via Tradier Brokerage, Transforming into a news & fintech portal

Featured Topics

more Commodities>>

Commodities

Energy demand steps back in play
Advertisement
more Volatility>>

Volatility

Volatility & opportunity in the energy sector
more Financials>>

Financials

Daily Price Action: E-mini S&P 500
more Options>>

Options

Trading Vertical Option Spreads

Advertisement

Oil spreads widen as Iran rebuffs direct talks

Draghi, Khamenei and an Oil Glut

By Phil Flynn

February 8, 2013 • Reprints

Oil prices retreated despite the fall in the euro and a rebuff from Iran’s Supreme Leader who rejected direct talks with the U.S mainly because of fears of a growing oil glut in the United States. While Mario Draghi cooled off the red hot euro and the precious metals by saying policy makers were concerned about the euro’s meteoric rise, he showed he can move the euro with a word. First the promise to do whatever it takes and now just showing a bit of concern can break us. Yet while other commodities crumbled, the weight of growing U.S. crude supply pulled down the complex.

The Brent-WTI spread continued to widen due in part to the growing U.S. oil glut but also because of an increase in the geo-political risk trade. Iran’s supreme leader, Ayatollah Ali Khamenei, dashed hopes that there might actually be progress being made with the Iranian nuclear soap opera. After Joe Biden floated the idea and the Iranian Foreign Minister showed some interest in talking, some hoped that there would be some light at the end of the negotiation tunnel. Yet the rejection by the Supreme Leader seems that those were false hopes or perhaps evidence that the Supreme Leader is just fearful of having to be in the same room as Biden. Khamenei said, “Talks will not solve any problems, you are holding a gun against Iran saying, ‘Talks or you’ll fire.’ The Iranian nation will not be frightened by such threats.”  Iranian President Mahmoud Ahmadinejad took it a step further by saying that, “Talks are held to arrive at an understanding, not to impose anything,” Ahmadinejad said. “Such talks will be meaningless if someone raises a club and imposes” something on Iran.” (Yes, like your election.) He went on, “Talks would be productive only if they were based on mutual respect,” he said. “Things will be fine if the Americans correct the manner in which they address us.”

Yet those tough words come as the noose of sanctions continue to tighten around Iran’s neck. The geo-political risk on trade for oil is long the Brent and short the WTI. Bloomberg news reported that, "Iran, which dropped two places to become India’s fourth-largest crude supplier last year, may lose $2.5 billion of revenue as global sanctions prompt the South Asian nation to reduce purchases. Indian refiners may cut oil imports from Iran by as much as 20% in the year starting April 1 as the government seeks to keep its exemption from U.S. penalties on countries that trade with the Persian Gulf state, according to a Bloomberg News survey of five refinery officials. Iran would lose sales of at least 60,000 barrels a day of crude, worth about $2.5 billion a year, based on a reduction of that size from current contracted volumes, according to data compiled by Bloomberg. Iran Heavy for sale to Asia, the grade preferred by Indian refiners, traded at about $113 a barrel yesterday.

Behind the scenes Bloomberg reports that Japan and Saudi Arabia will sign an agreement this weekend that will allow Tokyo to make emergency requests for additional supplies of crude oil, Japan's Nikkei newspaper reported in its Feb. 8 edition. The agreement would set up a telephone hotline between the two governments to allow Japan to quickly seek additional oil supplies in the event of extraordinary circumstances such as terrorist attacks, unrest in the Middle East or a spike in the price of oil. Japanese Economy, Trade and Industry Minister Toshimitsu Motegi will travel to Saudi Arabia on Saturday to sign the pact, Nikkei said.

Page 1 of 2
>>next >

About the Author

Senior energy analyst at The PRICE Futures Group and a Fox Business Network contributor. He is one of the world's leading market analysts, providing individual investors, professional traders, and institutions with up-to-the-minute investment and risk management insight into global petroleum, gasoline, and energy markets. His precise and timely forecasts have come to be in great demand by industry and media worldwide and his impressive career goes back almost three decades, gaining attention with his market calls and energetic personality as writer of The Energy Report. You can contact Phil by phone at (888) 264-5665 or by email at pflynn@pricegroup.com. Learn even more on our website at www.pricegroup.com.

 

Futures and options trading involves substantial risk of loss and may not be suitable for everyone. The information presented by The PRICE Futures Group is from sources believed to be reliable and all information reported is subject to change without notice.

 

Related Articles
Energy demand steps back in play
Crude shoulder season blues
Crude corrects on production pop, but demand side is looming
Oil risk factors rise
Refiners work overtime as crude inventories drop
Previous
Stock market's range-bound trading reflects indecision
Next
Trade deficit in U.S. plunges on record petroleum exports
Related Terms
oil 6597Bloomberg 5254Oil 4709commodities 3439crude oil 3328Energies 2981Reuters 1669WTI 731Mario Draghi 685Brent 639Natural gas 421Oil prices 398Iran 352oil supplies 152oil imports 150Mahmoud Ahmadinejad 43oil glut 37Geopolitics 33Joe Biden 27Ali Khamenei 23storage 16Edison Electric Institute 8telephone hotline 1Natural gas longer term 1crude supplier 1Toshimitsu Motegi 1

Free Newsletter Modern Trader Follow

Main menu

  • Futures
    • Modern Trader Magazine
    • Commodities
    • Futures Mag Archives
    • ETFs
    • Financials
    • Forex
    • Managed Funds
    • Market Analysis
    • News
    • Options
    • Regulation
    • Technology
    • Trading Strategies
    • Education
    • Futures Op-Ed
  • Favorites
    • Alpha Pages Most Popular
    • Futures Magazine
    • Modern Trader Magazine
    • Most Popular
    • Slideshows & Lists
    • Special Topics
      • Alpha Hunters
      • Bad Boys
      • FINtech
      • High-Frequency Trading
      • Trader's Life
      • Trading Strategies
      • FUTURES MAG's 500th ISSUE
      • We asked traders
  • Traders
    • Market Data
    • Hot Charts
    • Interactive Charts
    • Trading Calendar
  • FINalternatives
  • Hard Assets
    • Home
    • Base Metals
    • Precious Metals
    • Rare Earth Metals
    • Commodities
    • Mining Investments
    • Slideshows
  • Modern Trader
    • Subscribe
    • Past Issues
  • All +
    • Follow Us +
      • FuturesMag
      • Newsletters
      • Facebook
      • Google+
      • Linkedin
      • Twitter
      • RSS Feeds
    • About Us +
      • About
      • Advertise
      • Contact
      • Contribute
      • Privacy Policy
  • !
images