How to Play the Oil “Head-Fake”

The “head-fake” decline in oil prices have decimated the budgets and geopolitical dreams of Venezuela, Iran and Russia. Who might gain if oil prices decline even further? Read the analysis at Of Two Minds.

Excerpt: “…let’s consider who has the capacity to flood an already glutted market and survive the final collapse of price. Saudi Arabia, Kuwait, the Gulf Oil states and Iraq come to mind: the first three due to their low production costs and reserves of cash, and Iraq because it can always count on the U.S. to provide whatever funds are needed to get through a rough patch of low oil prices. And now let’s tote up who will very likely not survive a further downleg in oil prices: Venezuela, Iran, Russia, and perhaps Nigeria and the West African oil exporters. By most published accounts, Iran and Venezuela require oil prices to stabilize around $80/barrel to fund their various welfare states and geopolitical ambitions (nuclear and otherwise). If oil falls to $20/barrel or lower and stays there, then their welfare states and costly geopolitical plans both implode.”

head-fake2

About Caracas Gringo

Representing less than 0.00000000001515152% of the world population as of 31 December 2011.
This entry was posted in Uncategorized. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s