Thursday, July 13, 2006
All bets are off on the price of oil this morning.
Here’s why: Israel and Lebanon are now going at it over Hezbollah rocket launches into Israel, the Israeli Air Force has retaliated by whacking Beirut International Airport (please double-check your flight connections today), and there is now an Israeli air and sea blockade being enforced against Lebanon.
Add this to the volatile mix already in the blender in Iraq, Iran, and Syria… Despite the best optimisms of learned men like yesterday’s esteemed guest, Fouad Ajami, who believes that ultimately, democracy and freedom will overcome centuries of oppressive regimes, for the near term it appears things will become a bit more dicey in the region.
Remember the variables in the price of oil…supply, demand, and risks from natural disasters and war. There’s about a $25/bbl speculation-premium on oil…part of the speculation is on how spectacularly the people in the Middle East continue to behave.
Place your bets?