Oil’s Grand Bargain Falls Victim To Saudi Arabia’s Iran Fixation; Oil Prices Plunge On The News

Oil’s Grand Bargain Falls Victim To Saudi Arabia’s Iran Fixation; Oil Prices Plunge On The News

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      That’s according to Bloomberg News.  Elena Maznerva, Wael Mahdai, and Grant Smith, writing on the April 17, 2017 edition of the website, note that “in the end, the outcome of Sunday’s summit of all 16 oil ministers at Qatar’s Sheraton hotel turned on one country that wasn’t there,” (Iran).  “Iran’s decision, on the eve of the summit, not to attend” they write, “signaled things wouldn’t go well.  When the ministers assembled the next day, Saudi Arabia stunned some of them by insisting every OPEC member, including Iran, by insisting every OPEC member, including Iran, must subscribe to the deal to freeze production.”  Commodities traders are reacting negatively, with Nymex Crude and Brent Crude both trading down well over $2 as I write this short note, or -5.7 percent.  I would expect oil to trade lower still in the coming days, and head down toward the $35 range as the first key technical point.  If you have an investment timeline of at least six months, you may want to position yourself to take a position in oil companies that you think will eventually emerge in a strong position by the spring of 2017.  I am likely to buy shares of Marathon oil sometime this week.  U.S. stock futures, not surprisingly, are also tanking….pun intended….with DOW futures down 80 basis points, and the NASDAQ off by 22.  On the other hand, gold, silver, and precious metals are up on negative bond yields, a stronger Yen, and a perception that Central Bankers are not only out of ammo; but, are also intellectually bankrupt.  This should mean higher profits for gold miners and earnings that may surprise to the upside.  All for now.  V/R, RCP

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