July 2nd, 2015
This week, reports emerged that a draft deal on Iran’s nuclear program would be reviewed by the Western negotiators. Crude oil prices plummeted – West Texas Intermediate (WTI) closed down 4.2%, at $56.96 a barrel, the lowest since April 22.
The concern spurring the decline is that an agreement would lift the Western sanctions and allow Iranian oil to flood into the market, propelling prices down.
But there’s only one problem.
There was no genuine truth to the rumor, as confirmed by actual negotiation participants last evening.
Now, I am not somebody who falls into line with each conspiracy theory on market machinations that comes down the pike. But this sequence of events was tailor-made for one.
So let’s set the record straight on the negotiations.
Here’s my take on what’s really going on…
June 30th, 2015
In Greek history, there is a story that after devising the Athenian system of governance the great classical lawgiver Solon was walking down from the sacred council site of the Areopagus when he was greeted by another citizen.
“Well, Solon, did you give Athens the best constitution possible?” the fellow asked.
“No,” Solon responded. “I gave her the best constitution she could accept.”
It seems politics in the cradle of democracy haven’t changed much in the last 2,500 years.
Take the current (and soon to be former) Greek Prime Minister Alexis Tsipras as a good case in point.
His Syriza party currently “anchors” the government in Athens. Essentially a coalition of the far left in the Greek political spectrum, it rode into power on a wave of popular anger over debt and creditors.
This populist government has now broken off negotiations with creditors. Greece will certainly miss its interest payment to the International Monetary Fund (IMF) due today and will not be able to make the larger payments to the European Central Bank (ECB) scheduled over the next month.
Here’s my take on how this Greek drama will play out… and affect the energy markets…