Posts Tagged: iran export

 

Between the Chinese ‘surprise’ RRR and the Iran export halt to UK and France (and escalating tensions), Oil prices are off to the races this evening. WTI front-month futures have just broken $105 (now up more than 10% in the last two weeks), the highest levels in over nine months and just 8% shy of the 5/2/11 post-recession peak just under $115. Brent (priced in EUR) remains off last week’s intraday highs (as EUR strengthens) but still above the pre-recession peak but in USD it traded just shy of $121 – well above last week’s peak. Of course, this will be heralded as a sign of demand pressure from a ‘growing’ global economy rather than the margin-compressing, implicit-taxation, consumer-spending-crushing supply constraint for Europe and the US that it will become in the not too distant future. As we post, The Guardian is noting that US officials are commenting that “Sanctions are all we’ve got to throw at the problem. If they fail then it’s hard to see how we don’t move to the ‘in extremis’ option.” The impact of any escalation from here is gravely concerning with PIMCO’s $140 minimum and SocGen’s $150-and-beyond Brent prices rapidly coming into focus – and for those pinning their hopes on the Saudis coming to the rescue (and fill the Iranian output gap), perhaps the news that our Middle-East ‘allies’ cut both production and exports in December will stymie any euphoria.

From The Guardian: US officials believe Iran sanctions will fail, making military action likely

• Growing view that strike, by Israel or US, will happen
• ‘Sweet spot’ for Israeli action identified as September-October
• White House remains determined to give sanctions time

It’s not that the Israelis believe the Iranians are on the brink of a bomb. It’s that the Israelis may fear that the Iranian programme is on the brink of becoming out of reach of an Israeli military strike, which means it creates a ‘now-or-never’ moment,” he said.

That’s what’s actually driving the timeline by the middle of this year. But there’s a countervailing factor that [Ehud] Barak has mentioned – that they’re not very close to making a decision and that they’re also trying to ramp up concerns of an Israeli strike to drive the international community towards putting more pressure on the Iranians.”

On 15th Feb ,We had written about WTI CRUDE : http://bit.ly/wWls2G

On 8th Feb ,We had written about BRENT CRUDE :http://bit.ly/xL0EAC

 

Between the Chinese ‘surprise’ RRR and the Iran export halt to UK and France (and escalating tensions), Oil prices are off to the races this evening. WTI front-month futures have just broken $105 (now up more than 10% in the last two weeks), the highest levels in over nine months and just 8% shy of the 5/2/11 post-recession peak just under $115. Brent (priced in EUR) remains off last week’s intraday highs (as EUR strengthens) but still above the pre-recession peak but in USD it traded just shy of $121 – well above last week’s peak. Of course, this will be heralded as a sign of demand pressure from a ‘growing’ global economy rather than the margin-compressing, implicit-taxation, consumer-spending-crushing supply constraint for Europe and the US that it will become in the not too distant future. As we post, The Guardian is noting that US officials are commenting that “Sanctions are all we’ve got to throw at the problem. If they fail then it’s hard to see how we don’t move to the ‘in extremis’ option.” The impact of any escalation from here is gravely concerning with PIMCO’s $140 minimum and SocGen’s $150-and-beyond Brent prices rapidly coming into focus – and for those pinning their hopes on the Saudis coming to the rescue (and fill the Iranian output gap), perhaps the news that our Middle-East ‘allies’ cut both production and exports in December will stymie any euphoria.

From The Guardian: US officials believe Iran sanctions will fail, making military action likely

• Growing view that strike, by Israel or US, will happen
• ‘Sweet spot’ for Israeli action identified as September-October
• White House remains determined to give sanctions time

It’s not that the Israelis believe the Iranians are on the brink of a bomb. It’s that the Israelis may fear that the Iranian programme is on the brink of becoming out of reach of an Israeli military strike, which means it creates a ‘now-or-never’ moment,” he said.

That’s what’s actually driving the timeline by the middle of this year. But there’s a countervailing factor that [Ehud] Barak has mentioned – that they’re not very close to making a decision and that they’re also trying to ramp up concerns of an Israeli strike to drive the international community towards putting more pressure on the Iranians.”

On 15th Feb ,We had written about WTI CRUDE : http://bit.ly/wWls2G

On 8th Feb ,We had written about BRENT CRUDE :http://bit.ly/xL0EAC

 

 

Credit Suisse

India: Current Account Deficit Obfuscates Oil Outstandings To Iran, Export Growth Unsustainable

As per the RBI, India’s current account deficit fell to an estimated 2.5% of GDP in the March 2011 quarter, from 3.1% in 9MFY11. Driving this is a cut in trade deficit due to (1) a fall in implied oil import
volume (Fig 1) and (2) a rise in exports.
 
 We note that implied Indian oil import volumes have fallen sharply. This 26% YoY fall seems to be an accounting flaw, partly due to non-payments to Iran. If we take last year’s volumes on this year’s oil
price, CAD would increase by US$14 bn (0.8% of GDP).

Exports started picking up from Nov 2010. We now have a split. The increase – at least in Nov-10 – was limited to a few sectors : metals (50%), transport equipment (likely auto parts, 20%) and cotton + yarn (15%) are together 85% of the incremental growth, but only 25% of total exports.
 
 Agri exports (mainly cotton), while small, helped the recent surge. Cotton prices in Nov-10 were up only 50% YoY to c.US$120/lb.

In subsequent months, they rose to US$200/lb, and may have played a larger role in export growth till March 2011. They are now down to ~$150. Exports may continue to be strong, but the Nov-10 split does not provide confidence in sustainability. In the absence of trade support, despite a record US$76 bn in fund inflows in FY11 (equity+debt), the Rupee has been weak (except against the USD). This creates a worrying circularity for investors. >> Read More

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Technically Yours,
Team ASR,
Baroda, India.