And the news...
Evaluation: Most of the cabinet for Iran attack
Eight ministers tend to support the position of Netanyahu and Barak for attack Iran, against six opponents. Cabinet members told the Knesset, Netanyahu's speech yesterday: "It sounds like a speech preparation for attack." A senior official: "The prime minister did not wait for U.S. elections in November"
A majority of the Israeli Security Cabinet votes to attack Iran and before US elections.
This week was interesting in the floated rumor of a release of oil from the Strategic Petroleum Reserves that was quickly denied by the White House, it seems they were testing the market's reaction. As mentioned yesterday, The USS Enterprise Aircraft carrier is headed for the region making 3 Aircraft carriers in the 5th AOR (there's usually never more then 2) and all within striking distance of Iran. Furthermore the US is sending more mine sweeper ships to the region.
Why Israel would make the vote public if they really intended to attack is beyond me, but the Israelis know that Obama will likely be less supportive of an attack after US elections if he is re-elected, before the elections he doesn't want to lose the Jewish vote so an Israeli attack before then makes sense.
While USO did surge, +1.84%, BNO saw a bigger move of +2.92%. Presumably the bigger move in BNO is because of the underlying assets each represent. USO represents WTI crude or "West Texas Intermediate" while BNO represents Brent Crude. I think it's a given that Brent will rise more then WTI being WTI is made right here in the US and is a sweeter crude. Brent has a higher sulfur content and therefore is considered more "sour" which means it costs more in refining to remove the sulfur. Crude from the middle east for the most part is more sour, Saudi Arabian Crude is particularly sour whereas Libyan crude is sweeter. It takes 3 barrels of Saudi Crude (post refinement) to equal 1 barrel of Libyan crude and many refineries can't even remove the amount of sulfur in Saudi Crude, so whenever you hear that the Saudis will take up the slack with their "proven" but highly doubted reserves, it's not as simple as that. I'm not sure what kind of crude Iran produces, but it stands to reason that there will be a price divergence between WTI and Brent on an Iranian attack, although both should spike on an attack initially.
We'll follow these developments, as I mentioned, why announce to Iran the outcome of the vote if there is real intent on attacking soon?
I would guess that the price of gas is about to spike even further and of course that's not good for the economy, especially the European as the French are now paying $10 a gallon.
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