Friday 23 December 2011

Sabre-rattling in the Middle East

Oil up on supply worry, hopeful data
Oil rose for a fourth straight day on Thursday in thin, choppy trading on fears of potential supply disruptions from Iraq and Iran and supportive U.S. economic data.


22 December,2011

An outburst of violence in Iraq and news of upcoming Iranian navy exercises reinforced oil's geopolitical fear premium. Oil also received a boost from reports showing U.S. jobless claims fell last week, while consumer sentiment improved more than expected in December.

Dominick Chirichella, analyst at New York's Energy Management Institute, said investors could expect low year-end liquidity to result in relatively large intraday moves.

"Iran and the broader Middle East, including Iraq now that the United States is gone, will continue to act on the oil market with exposure for price spikes at any time. The geopolitics of the region are once again on the radar," he said.

Brent February crude rose 18 cents to settle at $107.89 a barrel, after reaching $108.50. Possible resistance loomed at Brent's 100-day moving average of $109.30.

U.S. February crude rose 86 cents to settle at $99.53 a barrel, having reached $100.05.

Brent and U.S. crude trading volumes were less than 275,000 lots traded in post-settlement dealing, with Brent 48 percent below the 30-day average and U.S. volume 58 percent below its 30-day average.

U.S. crude oil implied volatility fell for a fifth consecutive day, and was at 35.84 percent in late trading. It dropped to a nearly five-month low of 34.25, using the Chicago Board Options Exchange's Oil Volatility Index .OVX as a proxy.

Brent's premium to U.S. crude narrowed, falling below $9 a barrel.
"The euro zone problems might be limiting Brent, but U.S. crude is probably being supported by the recent drawdowns in crude stocks, including the big 10-million-barrel draw in the EIA report yesterday," said Tom Bentz, director at BNP Paribas Prime Brokerage Inc in New York.

U.S. Energy Information Administration data showed domestic crude stocks fell 10.6 million barrels last week, the biggest weekly fall in nearly 11 years.

SUPPLY FEARS

A rash of bombings hit Baghdad in the first big attack on Iraq's capital since a crisis between its Shi'ite Muslim-led government and Sunni rivals erupted after the withdrawal of U.S. troops.

State television quoted a navy commander as saying Iran's navy will conduct a 10-day wargame in an area from east of the Strait of Hormuz to the Gulf of Eden starting on Saturday, adding to oil supply worries.

In Kazakhstan, KazMunaiGas Exploration Production (KMGq.L) said it expected to meet a reduced oil output target for 2011 after this week's riots.
REDUCED NIGERIAN OUTPUT
OPEC member Nigeria has suffered an actual supply disruption. Royal Dutch Shell (RDSa.L) said its 200,000-barrels-per-day deepwater Bonga facility, which accounts for around 10 percent of Nigeria's output, is shut with no planned restart date after an oil leak on Tuesday.

Nigeria will load around 1.93 million bpd of crude oil in February, according to trade sources, putting exports below the 2011 average even if the Bonga field is back up promptly.

But even with current fears for and actual disruptions, seaborne oil exports from OPEC, excluding Angola and Ecuador, are expected to rise by 400,000 bpd in the four weeks to January 7, according to UK consultancy Oil Movements

For article GO HERE



Iran Is Planning A Naval Drill Around The Strait Of Hormuz On Christmas Eve

22 December, 2011

Beginning on December 24, the Iranian Navy will hold a 10-day drill near the Strait of Hormuz in international waters.

The AFP reports that Fars news agency announced the drill will cover east of the Strait of Hormuz and the Gulf of Oman to the Gulf of Aden.

Iranian Naval Commander Admiral Habibollah Sayari said "This is the first time that we are covering such a large area."

While the country's official stance is that closing the Strait of Hormuz is "not on the agenda," the concern lingers after the Dec. 14 rumor from an Iranian lawmaker that Tehran intended to do just that.


When asked Dec. 22 if the strait will be closed as part of the impending naval drill, Sayari said, according to the ISNA news agency, "The ability to do so exists. Whether to go ahead lays with the regime's top officials."

Adm. Sayari said the upcoming drill will be a chance to employ Iran's "newest missile torpedo system." What he's likely referring to is the Valfajr (The Dawn), a short-range marine missile and torpedo system it unveiled in August 2011.

Named after an Iranian offensive during the Iran-Iraq war, the Valfajr has a payload of 485 pounds and can be employed in shallow, or deep, water.




I checked this story - it is only being covered by Iran TV and Palestinian advocacy groups, but not by western media.  Is this just Iranian lies/propaganda?  Most lying is done by omission and misrepresentation.

Israeli tanks invade south Gaza
Israeli troops accompanied by tanks and bulldozers have launched a ground incursion into the city of Khan Yunis in the south of Gaza Strip, Press TV reports.



22 December, 2011

Witnesses said the troops and vehicles started to raze farmland in the area during the early hours of Thursday, a Press TV correspondent reported. 

Gunfire has also been heard in the area, causing widespread panic among the residents, especially children. 

No casualties have been reported. 

Israel has escalated such incursions into Gaza over the past few weeks. 

Israeli officials claim that the latest incursion was “necessary to comb the area for any Palestinian activities by resistance factions.” 

The Thursday attack in Khan Yunis was carried out ahead of the anniversary of the December 2008-January 2009 Israeli war against Gaza, which killed more than 1,400 Palestinians. 

On Saturday, a Palestinian man was killed in an attack by an Israeli tank in the Bureij town in eastern Gaza. 

Residents still live in what is known to be the “world's largest open-air prison” as Israel remains in full control of the airspace, territorial waters and border crossings of Gaza. 




Defense Drill Say Anything About Plans For Iran?
20 December, 2011


Israel just announced it has finalized a deal with Lt. General Frank Gorenc, commander of the US Third Air Force in Germany, that will bring several thousand U.S. troops and two advanced missile systems to the country for an unprecedented defense drill.

Yaakov Katz of the Jerusalem Post reports the "largest-ever" missile defense exercise will commence this spring, in response to Iran's nuclear ambitions.

The U.S. will deploy its Theater High Altitude Area Defense (THAAD) missile system and its ship based Aegis system to simulate intercepting an incoming salvo into Israel. The two systems will work in conjunction with Israel's Arrow, Patriot, and Iron Dome missile systems.

The announcement came in conjunction with Israel's pledge to move batteries of its Iron Dome in the coming months to counter rocket attacks, and stationing additional batteries in Haifa to guard oil refineries there.

Israel is also increasing its missile development budget for FY 2012 to include three new Iron Dome batteries along its northern and southern borders.

Of course, what this drill means in regard to a strike on Iran's nuclear facilities remains to be seen — if it means anything at all.

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