The oil price .

[Ross]

When I look at this chart of the Baltic Dry Index Vs Oil it seems to
me that the BDI leads oil by roughly 8 to 12 months.

Implication ... the oil price is going to stay low for at least
another 8 months without another QE ???




But then when I look at the logarithmic chart oil appears overdue for
a big plunge . Should we assume Iranian tensions are holding up the price
otherwise there would be a plunge ? If so then it raises interesting questions
about timing of the Iranian sanctions and whose interests are being looked
after .

[dharma]

The Saudis control the price. They've pushed it down because they're trying to punish the Iranians and the Russians.

[Ross]

Actually I was trying ( rather badly ) to present a case
that Oil may be due for a price fall .

[dharma]

Cushing is a roach motel for oil; once it gets in, it can't get out. US stocks really mean Cushing stocks, which artificially depresses the WTI price relative to the prices paid by most of the world, including the US Gulf Coast. In other words, that graph shows numbers which are artificially elevated, and bear little relation to true world stocks.

Prices have risen in the last few days because the Iranians continue to act like idiots, and traders are increasingly thinking that the Israelis will have to thump them, and sooner rather than later.

Fundamentals are highly problematic in this market.

[penguinzee]

Yeah, we got a lot of oil, and as dharma points out, the Iranians are acting like idiots (granted, we're not a whole lot better, but that's beside the point).

At this point I highly doubt we'll see an attack, as Ramadan just started... be pretty damn foolish to attack right at the beginning of a high holy month, if you ask me... then when Ramadan breaks, we're into high political season here, another risky time to be putting an invasion on... so posturing aside, I really can't see an attack on Iran happening before the first of the year, unless something REALLY BAD or STUPID happens to ignite hostilities... of course, we are talking Iran and the USA...

Franc (penguinzee)