Oh, we really need this:
Nomura Securities says that if Algeria joins Libya in the land of chaos, oil prices could shoot to $220 a barrel. That’s in a worst-case scenario, the investment bank adds unhelpfully.
To back up that headline grabber, Nomura compares the current situation to the 1990-91 Gulf War. During that time, oil prices rose 130% in two months, according to our friends at Dow Jones. Nomura defends the comparison by saying “we could be underestimating this as speculative activities were largely not present in 1990-91.” — Dave Kansas in the Wall St. Journal
Kansas continues to say that he sees such a huge jump as unlikely, given the relative amount of oil produced in Algeria and Libya compared to Saudi Arabia and others. And a commenter points out that traders want to stimulate activity to make money.
Oil surged to $100 a barrel in New York for the first time in two years as Libya’s violent uprising threatened to disrupt exports from Africa’s third-biggest supplier and spread to other Middle East oil producers.
Futures climbed as much as 4.8 percent after heavy gunfire broke out in Tripoli again today, army units defected and a former aide to Libyan leader Muammar Qaddafi warned the spreading revolt may topple the regime within days. Oil pared gains on signals that Saudi Arabia and some other producers are willing to put more oil on the market if buyers demand it.
“We’re crossing $100 because with the cut in Libyan output, the unrest in the Middle East is actually having an impact on oil supply,” said Phil Flynn, vice president of research at PFGBest in Chicago. “There’s concern that unrest will spread further, threatening Saudi Arabia and other producers.”
Crude for April delivery increased $2.68, or 2.8 percent, to settle at $98.10 a barrel on the New York Mercantile Exchange. Earlier, it touched $100, the highest level since Oct. 2, 2008. Futures are up 24 percent from a year ago. — Bloomberg
Folks, this is the number one issue that will make the USA sit up and take notice that there is a Middle East. From Joe Sixpack to the Congress and the President, no one will ignore the price of gasoline and heating oil, even if it doesn’t get to $220. The problem is that while Sixpack will whine about it, the political class will feel obliged to Do Something About It. And experience shows that we will begin to hear that the key to everything in the Middle East is the creation of a Palestinian Arab state.
This is so dumb that I have a hard time even writing it. Who could possibly believe that the explosive events now occurring in the Arab world, the collision of the entrenched conservative dictators with the forces of liberalism, Islamism and just plain tired-of-being-ripped-off-ism, are even peripherally related to the hundred-year war against the Jews in the land of Israel?
Don’t worry. As soon as gasoline prices close in on $4 per gallon in the US, I guarantee that we will hear from the usual suspects that the road back to nostalgically cheap gas will be to impose a ‘solution’ on Israel and the Palestinian Arabs. Obama confidant and trial-baloonist former Florida Congressman Robert Wexler hasn’t exactly said that (yet), but he does think that right now is the time to de-humiliate the long-suffering Palestinians by diktat:
The continuing turmoil has dramatically altered each side’s calculus. But this uncertainty also provides a narrow window of opportunity. It is clear from the region’s paralyzed leadership that resolution of the Israeli-Palestinian conflict is, unfortunately, dependent on U.S. initiative.
It is delusional to assume that the West Bank and Gaza will sit idly by until leaders feel more comfortable to address the pressing issues. If Egypt has taught us anything, we are forewarned that the Palestinian quest for dignity and statehood cannot remain the exclusive domain of diplomats for long. Better to get out ahead of events, while the United States, Israel and moderate Palestinians still enjoy considerable leverage.
What he doesn’t explain, since we are all presumed to understand, is why it is somehow advantageous to create yet another dictatorial, racist Arab state for a self-defined ‘people’ whose national project is defined entirely by hatred of and opposition to a Jewish state. Nor does he mention that ‘moderate Palestinians’ do not enjoy any leverage, primarily because they don’t exist, and that the state that he wants to create will shortly become an Islamist theocracy, ruled by Hamas, and a base for terrorism.
I was driving in my car when I turned on the radio. I heard our President calling for the international community to do the right thing and stand behind its historic promises to the Jewish people in the Mandate for Palestine, which had never been revoked. I heard him say that Judea, Samaria and eastern Jerusalem, which were invaded by the Arab nations in 1948, were still in dispute. He told us that UNSC resolution 242 called for a settlement in which all parties would live in peace within secure and recognized borders, and reminded us that no such agreement had ever been made. He added that there was no privileged status to the 1949 armistice lines, which simply marked the positions of the various armies at that time.
I stopped at a traffic light and looked out the window to see a gas station on each of four corners. “Gas War!” said the signs. “Twenty-nine point nine cents per gallon!”