It reinforces the value proosition of SAFE reserves, which with all the stupidity going on in the Middle East will catch the eye of the Koreans, Malaysians, Chinese ,and yes, big American producers as well. Celtic take over XOM can take out half the big boys with its market cap alone.
Yes the last rise to 16 plus was triggered by QE3 , there were reports on CNBC all day that Bernanke would supersize the monthly bond buybacks, in essence giving us QE 4 but not formally announced like last time. Some within the FED are wanting rates to stay low til 2020. Now that would cause a massive devaluation of the dollar.
The other point is all price spikes in oil have had world conflict as the initial catalyst now. With the election over the media is finally looking at the Middle East again and saying " Oh no this aint good". Talk of ground force in vasion of the Gaza strip by Israel, they are calling up RESERVISTS. Embassies shut down and dismissed, you have the beginning of a conflict that will wildly escalte out of control. When Hamas talks about " opening the gates of hell " and the Israeli Defense Force saying no " Hamas leader should be sticking his head out above ground" thats a sign that diplomacy is dead anda declaration of war has ensued. At all times of conflict, remember the last Gaza invasion of 2008 ( Penn West was well over 30 then ), all the world focuses on securing LONG TERM SECURE RESERVES. Saudi Arabia , number one, Venezuela 2, Canada 3, hmmmm, pretty sure the WCSB will be pursued by any one with a brain . And remember also, seeing the madness of NYC with gas rations is enough to send shivers down the spines of most autocratic ASIAN LEADERS.
I also find it ammusing that just as the minute defense cuts in the States are about to kick in that the escalation intensifies. Me thinks defense spending and all else will be ramped up now more than ever, more defecit borrowing, weaker dollar, more QE and untimately a big shot in the arm to Canadian producers.
Now just pass Nexen and Progress deals and it wil l be more than just a short squeeze, could be a quick ride to 2008 levels. Remember oil does what no one ever expects it to do!!!!!!