Iran can't find a buyer for their oilSubmitted by jzneff on Fri, 05/16/2008 - 13:16
The bottom is falling out of the oil market. I've been arguing for a while now that the recent run up in oil is simply money looking for a home...people bailed from derivative based investments and have bought up oil at any price.
This is further arguing that the oil spike is unsustainable. Iran is having a hard time finding buyers for oil, even at $10 below West Texas Intermediate Crude. This article talks of refinement capacity, but I think that's the wrong animal to point at.
The problem Iran is facing is they are embargoed from selling to the US. They sell to Russia, China, and others, but not to us.
People in the US can (begrudgingly) afford to pay $124 a barrel of oil. China simply cannot, and it is starting to show. The market for oil is drying up at these prices, which point to one thing...a huge fall in prices.
Please don't believe the media hype about $200 oil in the near future. It isn't going to happen, unless someone in the world does something truly stupid.
China can't afford the oil now, and the US is cutting back. People aren't going to be driving anywhere but to work and back this summer, flights are being cancelled all over, people are scraping for local suppliers for food since fuel costs too much to move it. The US consumption is down, and the rest of the world simply cannot afford oil where it is.
You're going to see the oil ceiling in the next 2 weeks...they may be able to scare up enough fear to get it to $128-130, but then the fun begins.
US consumption is down, China and Indian consumption will virtually dry up, and oil will begin it's fall. It's going to be glorious to see all those malinvesting prospectors get crushed in the face of logic overcoming fear and panic.
Oil is coming down...things are looking up!