Tensions in the Gulf could reach a breaking point as a senior Iranian official said Iran would “definitely” close the Strait of Hormuz if an EU oil embargo disrupted the export of crude oil.

Mohammad Kossari, deputy head of parliament’s foreign affairs and national security committee, issued the warning in respone to a decision by the European Union on Monday  to impose an oil embargo on Iran over the country’s alleged nuclear weapons program.

“The pressure of sanctions is designed to try and make sure that Iran takes seriously our request to come to the table,” EU foreign policy chief Catherine Ashton said.

However, with Washington’s decision to deploy a second carrier strike group in the Gulf, the EU’s attempt to pressure Iran economically could greatly increase the likelihood of all-out war in the region.

The Strait of Hormuz is the vital link between the Persian Gulf and the Gulf of Oman.

It is also one of the most strategic chokepoints in the world when it comes to oil transit.

Read the rest here.

Will the U.S. continue to decouple ?

WASHINGTON (Reuters) – The Congress has the constitutional right to legislate permits for cross-border oil pipelines like TransCanada’s Keystone XL, according to a new legal analysis released late on Friday.

The study by the nonpartisan Congressional Research Service could give a boost to Republicans drafting legislation to overturn a decision this week by President Barack Obama to put the $7 billion Alberta-to-Texas project on ice.

Historically, U.S. presidents have made executive decisions on pipelines that cross borders. But Congress had the power all along to weigh in on the permits, said the study, done by four legislative attorneys with the CRS.

“If Congress chose to assert its authority in the area of border-crossing facilities, this would likely be considered within its Constitutionally enumerated authority to regulate foreign commerce,” the study said.

Read the rest here.

This is a guest post by Chris Cook, former compliance and market supervision director of the International Petroleum Exchange.

All is not as it appears in the global oil markets, which have become entirely dysfunctional and no longer fit for its purpose, in my view. I believe that the market price is about to collapse as it did in 2008, and that this will mark the end of an era in which the market has been run by and on behalf of trading and financial intermediaries.

Now +4.4% for the day, near $22.

“Copper traders are the least bearish in a month as the metal has its best start to a year since at least 1987 and stockpiles tracked by the world’s biggest metals exchange were poised to slump to the lowest in 3 1/2 years.

Fourteen of 30 analysts surveyed by Bloomberg expect the metal to decline next week, the lowest proportion since Dec. 23. Three were neutral. Prices reached a four-month high of $8,428.50 a metric ton today, taking this year’s advance to 11 percent. Inventories (LSCA)tracked by the London Metal Exchange are already the smallest since December 2010 and existing orders to withdraw metal may reduce that to the lowest since July 2009.”

Full article

What America is Thinking on Energy Issues

Washington, D.C., January 18, 2012 – Seventy percent of American voters favor increased access to U.S. oil and natural gas resources, and similar numbers believe more oil and natural gas development would provide major benefits to the nation, including more U.S. jobs, according to a new poll released today.

“Voters know developing more of America’s homegrown energy makes sense for our economy and our energy security,” said API President and CEO Jack Gerard. “Our economy will demand large amounts of oil and natural gas for at least several more decades even as the role of alternative energy increases. Common sense says we should have Americans producing that oil and gas here at home as much as possible.”

The recent API telephone poll, conducted by Harris Interactive, among 1,005 registered voters found that large majorities believe that more U.S. oil and natural gas development could lead to more American jobs (87 percent), help the U.S. economy and reduce consumer energy costs (83 percent), increase the nation’s energy security (82 percent), and deliver more revenue to the government (72 percent). Over two-thirds (70 percent) believe that some in Washington are intentionally delaying domestic oil and natural gas development, potentially hurting the economy and leading to higher energy costs for consumers.

Read the rest here.

Six House Democrats, led by Rep. Dennis Kucinich (D-Ohio), want to set up a “Reasonable Profits Board” to control gas profits.

The Democrats, worried about higher gas prices, want to set up a board that would apply a “windfall profit tax” as high as 100 percent on the sale of oil and gas, according to their legislation. The bill provides no specific guidance for how the board would determine what constitutes a reasonable profit.

The Gas Price Spike Act, H.R. 3784, would apply a windfall tax on the sale of oil and gas that ranges from 50 percent to 100 percent on all surplus earnings exceeding “a reasonable profit.” It would set up a Reasonable Profits Board made up of three presidential nominees that will serve three-year terms. Unlike other bills setting up advisory boards, the Reasonable Profits Board would not be made up of any nominees from Congress.

Read the rest here.

CNBC – 53 minutes ago

Natural-gas futures hit a fresh 10-year low Thursday and will likely decline further as the latest supply data confirms an abundance of U.S. gas supplies amid new predictions for a warm winter.

“We just got a report from NOAA about February temperatures being above average,” said John Kilduff of Again Capital. “That means there’s going to be below normal demand for the time being. It’s good news for consumers, and as far as natural gas prices go, you can only argue for them to go lower and lower.”

Natural gas futures (New York Mercantile Exchange: NGCV1) touched $2.33 per million BTUs Thursday, the lowest price for the front month contract since March, 2002. The U.S. Energy Information Administration reported that total domestic gas inventories fell by 87 billion cubic feet, less than expected, to 3.290 trillion cubic feet.

A new forecast from the National Oceanic and Atmospheric Administration Thursday predicted February temperatures for most of the central and eastern U.S. would be above normal. Temperatures will be most above normal from the southern mid-Atlantic states through the deep south, while the Pacific Northwest will see below normal temperatures.

Kilduff said the storage estimates for the winter season’s end, March 31, range from about 2 to 2.4 trillion cubic feet, well above the average 1.5 trillion cubic feet.

“This is a classic case of oversupply,” said Daniel Yergin, chairman of IHS CERA. done at request for office of fossil energy

Oil demand has fallen for the first time since the 2008-09 global financial crisis, a result of the weakening economy, a mild winter and high crude prices, according to new estimates from the International Energy Agency.

Read the rest here.

$CLR, $TPLM, $KOG, $NOG, & $OAS

+6.8% to $20.84.

Refinery related stocks are higher.

Morgan came out with a metals report slashing most of their estimates for 2012

Of course the IMF news helps….

Inflate your problems away….

Print until oblivion

TEHRAN, Iran (AP) – Iran’s OPEC governor said Tuesday a European Union embargo on Iranian oil would be “economic suicide” for Europe, the latest stiff statement reflecting Iranian concern about the prospect of deeper sanctions over its nuclear program.

Iran is OPEC’s second largest oil producer, and oil exports account for 80 percent of Iran’s foreign currency income. Iran sells about 20 percent of its oil exports to Europe.

European nations are considering whether to go along with new U.S. legislation outlawing transactions with Iran’s central bank, indirectly limiting Iranian oil shipments by making it harder for customers to pay for them. The law takes effect later this year.

Iran has reacted with a string of strong pronouncements. It threatened to close the Strait of Hormuz, where most of the Gulf’s oil exports pass, it scheduled war games in the area of the strait, it warned the U.S. not to send an aircraft carrier back into the Gulf — and now it is cautioning Europe over the consequences of abandoning Iranian oil.

One of the largest producer of chemicals for the oil and gas industry is filing….

SEOUL, South Korea – South Korean customs officials say they have arrested eight men over a scheme to allegedly smuggle gold out of the country by hiding it in their rectums.

The Korea Customs Service said Monday the men allegedly transformed $260,000 in gold bars into small beads and smuggled them in their rectums to Japan two times in 2010 to avoid import taxes.

South Korea says Japanese custom officials caught the men on their second attempt and sent them home after imposing fines. Later, one of the suspects allegedly orchestrated an unsuccessful bid to smuggle gold bars from Mongolia to Hong Kong using a similar method.

Meanwhile, South Korean officials gathered evidence against them at home. They say the suspects recently admitted to the smuggling after initial denials.
Read more: http://trade.cc/zto