Oil (NYMEX:CLM14) trade is marking time again as the market will decide just how fearful we should be before we enter into the long U.S. Memorial Day Weekend. Risk premium is keeping prices high as the market frets about the increasing violence in the Ukraine ahead of the May 25 election. They also are worried about the deteriorating situation in Libya, Nigeria and Algeria.
Vladimir Putin is calling the violence in Ukraine a full scale civil war, and he should know because he started it. This declaration may be a reason or excuse that he will use if the election results do not go his way. Russia, according to Ukraine, is stoking the violence to try to indimitate the Ukrainian electorate. In the meantime the threat to supply is growing as Gazprom deadline on payment is looming. Does anyone want to bet on how this is all going to come out next week? More than likely that bet will be based in fear.
In Libya, General Khalifa Heftar has been leading an armed revolt. CNN says his campaign, dubbed "Operation Dignity," aims to break the power of Islamists who lead parliament. He accuses the Islamists of fueling Libya's chaos and opening the door to extremism.
Yet according to the Guardian his critics accuse him of being an American plant. Heftar's old links with the CIA have come back to haunt him – with enemies denouncing him as an American "agent". In Libya's charged political mood, the accusation is toxic but it may be misleading or simply old news. For the record the US has denied backing him; he has also denied being in contact with Washington. This has affected Libyan oil output at Western Oil fields which are basically shutdown.
In Nigeria we have ongoing violence but Nigeria's Gistmaster by Niyi Tabiti reports Speaker of the house of representatives, Aminu Tambuwal has ordered the immediate probe of Nigeria oil minister, Mrs. Dieziani Alison-Madueke over the aircraft charter scandal. He said the public accounts committee should commence an investigative hearing over the alleged 10 billion Naira charter aircraft scam involving the minister of Petroleum Resources. Weeks back, Justice Ahmed Mohammed of Federal High Court, Abuja denied speculations that he restrained the house of reps from probing Diezani Alison-Madueke over the aircraft charter scam. An effort by the petroleum minister to stop the problem has been unsuccessful.
Nat Gas (NYMEX:NGM14) got hit after The Nat gas report showing a larger than expected injection! Yet long term forecasts for hot weather could change that.
While too often while I talk about Memorial Day, as an oil analyst, it is referred to the official kickoff to the summer driving season, of course we know it is much more. From the first Memorial Day back in 1868 when a country still devastated from the unimaginable loss of life from the civil war acted to remember the dead. Commander in Chief John A. Logan of the grand Army of the Republic issued what was called General Order Number 11, designating May 30 as a Decoration day "for the purpose of strewing with flowers or otherwise decorating the graves of comrades who died in defense of their country during the late rebellion, and whose bodies now lie in almost every city, village, and hamlet churchyard in the land."
Today with the continuing war on terror the pain of loss is still being felt acutely and tears will be shed in cemeteries across the land. Those that gave all will provide a loss of talent and spirit that will always leave an empty space in the heart of this land. Yet it is that same spirit that of commitment and love and duty that makes this country the best in this land. So stop and say a prayer for the families and the soldiers that have given all and also pray for those that are still with us suffering from the scars of war. May God bless them all and I personally thank them.