Ad Hoc Commentary – Saudi Arabia vs Iran, WTI should stay supported at 35
In our 2015 wrap-up, we mentioned that:
“…Now that oil is at 35 dollars, we would likely see Saudi Arabia getting embroiled in some external geopolitics to distract the masses…”
https://tradehaven.net/ad-hoc-commentary-wrapping-up-2015/
That very weekend, the Saudi Kingdom did exactly what we said they would do:
“…”The Saudi government is looking … for some excuses to pursue its own unwise policies to further tension in the region,” he [Iranian foreign ministry spokesman Jaberi Ansari] said…”
http://www.cnn.com/2016/01/04/middleeast/saudi-arabia-iran-severing-ties-whats-next/
“…”The situation is extremely volatile between the two most powerful states in the Gulf, Sunni-dominated Saudi Arabia and Shiite-dominated Iran. You have a war of words. You have war by proxies … This really could get very ugly and dangerous in the next few weeks and next few months,” Gerges [Fawaz Gerges, chair of contemporary Middle Eastern studies at the London School of Economics] said…”
http://www.cnn.com/2016/01/04/middleeast/saudi-arabia-iran-severing-ties-whats-next/
As we mentioned exactly 11 months ago in our pipeline wars piece:
“…A new King would usually need to gain legitimacy among his subjects and it would not be surprising if there we see new-found assertiveness. Perhaps when WTI hits $35 US dollars…”
https://tradehaven.net/ad-hoc-commentary-russia-vs-saudi-arabia-pipeline-wars/
Once again, the nuclear powers of the world, namely Russia (and to a lesser degree their comrade China) and America will be forced to take sides, and in all likelihood, the proxy war in Syria will escalate even further. As we mentioned long time ago, Syria is the location of the proxy war, and Syria holds the key to peace in our time:
“…The most likely outcome from American assistance to rebels is Putin using it as a public relations campaign against America’s destabilizing actions, and to wage a proxy war. Syria will hold the balance between peace and war in our times…”
https://tradehaven.net/ad-hoc-commentary-for-peace-in-our-time-obama-should-leave-syria-alone/
“…Perhaps many years down the road, 09/30/2015 will be remembered as the day when the peace dove left us…”
https://tradehaven.net/ad-hoc-commentary-syria-escalating-into-a-russia-us-proxy-war/
Geopolitics will probably finally keep oil supported above 35 US dollars. Those who are calling for 20 US dollars oil probably forgot about geopolitics.
Good luck in the markets.