Oil prices broke out of their month-long trading range to the upside as we expected it would and now it has to complete the process. It is becoming apparent that global demand is on the rise as OPEC and U.S. production has been restrained. The upside trend should complete the process and resume a test of the $70.00 a barrel area in the coming weeks. It helps that China is completing its process by processing a whopping 14.14 million barrels of oil a day in March, almost 20% more than a year earlier. This came as their GDP hit 18.3%.
We were bullish before bullish was cool in oil and products and we hope that users took our advice and got hedged for the upside move. The risks for oil are still decidedly on the upside.
Joe Biden’s foreign policy seems to be making the world less stable. Biden is calling on Vladimir Putin to lower tension with the U.S. after calling the Russian President a killer. As Joe Biden said, “words matter” when you are President. The Biden administration then put several sanctions on that named 32 Russian individuals and entities for their roles in attempting to influence the 2020 U.S. presidential election. Biden is sending the wrong message.
Biden’s embracing of Iran and trying to get them to rejoin the 2015 nuclear accord will not stop Iran from getting a nuclear weapon. The Wall Street Journal reports that, “Iranian officials have said they want all the Trump-era sanctions removed before it returns to comply with the nuclear deal. “Anything imposed by the Trump administration should be lifted,” before Iran makes any concessions, Iranian chief nuclear negotiator Abbas Araghchi said in an interview last week. The Biden administration has said it is willing to lift all sanctions that are “inconsistent” with the nuclear deal but hasn’t identified those it will leave in place. Biden administration officials have said that they intend to retain some sanctions imposed on human rights, ballistic missile, and terrorism grounds and may impose new ones. They say that the 2015 deal doesn’t preclude such actions according to the Journal. They meet today so stay tuned.
Yet Iran has raised their uranium enrichment. Biden’s embracing of Iran has left our allies in Israel feeling like the U.S. has left them hung out to dry. The situation got so bad that U.S. defense security had to issue a reassuring statement that the U.S. still view Israel as an ally. U.S. Defense Secretary Lloyd Austin on Sunday declared an “enduring and ironclad” American commitment to Israel, reinforcing support at a tense time in Israeli politics and amid questions about the Biden administration’s efforts to revive nuclear negotiations with Israel archenemy, Iran according to AP. You might not know that by the Biden administration actions.
The BBC said Iran will produce 60%-enriched uranium in retaliation for a suspected Israeli attack on a nuclear site, President Hassan Rouhani says, bringing it closer to the purity required for a weapon. A blast knocked out the power system at Natanz on Sunday, causing damage to thousands of uranium centrifuges. Mr. Rouhani warned the perpetrators that enrichment would now be ramped up as a response to “your wickedness”. But he reiterated that Iran’s nuclear activities were “exclusively peaceful”. France, Germany, and the UK expressed “grave concern” at the move, saying Iran had “no credible civilian need for enrichment at this level”.
Joe Biden’s policies are raising the risk of a conflict and we haven’t even touched on tensions with China. Let’s pray that he gets things under control so the U.S. does not get dragged into an unwanted war.
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