Slope Of Hope with Tim Knight

Something's Fishy in Tripoli (by OilPrice)

Way back in early 2011, members of the U.N. Security Council had no problem getting a resolution through that authorized military force in Libya ostensibly to protect civilians from attacks by forces loyal to strongman Moammar Gadhafi. The year before, lawmakers on both sides of the Atlantic were bickering over who did what and why in terms of the cancer-stricken Lockerbie bomber. This Scottish decision to release him, depending on which U.S. lawmaker you spoke with, was tied to a BP deal to drill for oil in Libya. Despite fractures in the new interim government in Tripoli and reports of renewed protests, a decision by the Italian government to quietly discuss trade relations suggests something isn't quite right in the way Western allies pick their fights.

Triptych (by Trade Flight Plan)

China to Aid Saudi Arabia in Nuclear (by OilPrice)

Ever since the end of World War Two, the U.S. has come to regard Saudi Arabia as almost its exclusive oil producing enclave.

In February 1945, after the Yalta Conference with Soviet General Secretary Iosif Stalin and British Prime Minister Winston Churchill, on his way home U.S. President Franklin Delano Roosevelt and King Ibn Saud met aboard the New Orleans-class heavy cruiser U.S.S. Quincy in the Suez Canal’s Great Bitter Lake. During the meeting, instigated by Roosevelt, he and Ibn Saud concluded a secret agreement in which the U.S. would provide Saudi Arabia military security, including military assistance, training and a military base at Dhahran in Saudi Arabia, in exchange for secure access to supplies of oil.

Sixty-seven years later, my, how things have changed, as China is now muscling into the Kingdom of the Two Holy Places.

On 15 January Visiting Chinese Premier Wen Jiabao and Saudi Arabian King Abdullah bin Abdul Aziz agreed to make concerted efforts to enhance bilateral relations.

Slovakia’s Nuclear Schizophrenia (by OilPrice)

The implosion of the USSR in December 1991 produced massive economic “collateral damage” in its East European allies, as they simultaneously sought both to assert their new-found independence and draw closer to their potential European allies on the western side of 1946’s “Iron Curtain.”

Following the euphoria amity quickly devolved down to practical issues, one of which was that the European Union was leery of welcoming new members after the collapse of Communism that relied on power from Soviet-era nuclear power facilities, especially in the wake of the April 1986 nuclear disaster at Chernobyl in Ukraine.

Accordingly, the last two decades have devolved into a series of unseemly squabbles between Brussels and new Eastern European members, with the EU demanding the prompt shutdown of Soviet-era nuclear power plants, while governments east of Berlin plead understanding and extended timelines to shut down the facilities that provide major electrical input as they search for alternatives.

Lower Lows Overnight (by Springheel Jack)

The bounce yesterday was at an obvious level for the short term bull case, but lower lows on ES and EURUSD overnight are less encouraging. There's not much to work with on ES at the moment in terms of trendlines but I did come up with a short term rising channel that has just broken as I've been writing. There is some support at 1260.5 that is holding so far but if that breaks then a move down to 1244 is on the cards:

War Imminent in Straits of Hormuz? $200 a Barrel Oil?

The pieces and policies for potential conflict in the Persian Gulf are seemingly drawing inexorably together.

Since 24 December the Iranian Navy has been holding its ten-day Velayat 90 naval exercises, covering an area in the Arabian Sea stretching from east of the Strait of Hormuz entrance to the Persian Gulf to the Gulf of Aden. The day the maneuvers opened Iranian Navy Commander Rear Admiral Habibollah Sayyari told a press conference that the exercises were intended to show "Iran's military prowess and defense capabilities in international waters, convey a message of peace and friendship to regional countries, and test the newest military equipment." The exercise is Iran's first naval training drill since May 2010, when the country held its Velayat 89 naval maneuvers in the same area. Velayat 90 is the largest naval exercise the country has ever held.

Bang! mwDATR 2011 Edition (by Trade Flight Plan)

(To be read while listening to Countdown)

A TFP exclusive, it's been awhile since we published our last Margin Weighted Dollarized Average True Range (mwDATR^TM) analysis of the futures markets. In the past few months, volatility has expanded, the exchanges have played havoc with margin requirements, and the world continues to revolve around government debt reactions.

This Looks More "Pop" than "Buy"

Gold Triangle Cracked

My target? You really want to know? I'm thinking $1325. {ducks oranges and rotten tomatoes}

Could War Flare Again Between Iraq and Kuwait?

According to Iraqi Council of Representatives Oil and Energy Committee member Furat al-Sharei, the 10 oil fields that spread across the Iraqi-Kuwaiti frontier are still waiting to have a line drawn through them to delineate the border, more than eight years after a coalition led by U.S. forces toppled the regime of Iraqi President Saddam Hussein.

According to al-Sharei, the two countries must first collaborate in developing legislation for equitably sharing the fields before oil extraction can begin, noting, "The problem of the common fields can be resolved by developing legal mechanisms."