You guys and gals who tune in to the US-based financial news media should be familiar with the peripatetic and irrepressible Phil Flynn. This guy is simply everywhere. Until recently, I was unaware that he had a blog on the website of the firm he works for--Alaron Trading. While I don't always agree with him, he usually makes lots of lively commentary. To set the background for this week's increase in oil prices, let's get some quotes in the Wall Street Journal from (surprise!) Phil Flynn. To be honest, I see little connection between the attempted bombings in London to higher oil prices Stateside due to fears of attacks on the oil infrastructure, but here it is anyway:
"This week's rally was driven by a host of issues, from technical factors to stronger-than-expected demand to the increased threat of terror," said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago.
"Going into the weekend, traders have to be prepared that maybe al Qaeda will attack targets other than people, perhaps an oil facility," he said.
Light, sweet crude oil for August delivery on the New York Mercantile Exchange ended 87 cents higher at $70.44 a barrel after rising as high as $71.06.
I have just added Phil Flynn's blog, the Energy Report, to my blogroll (beware that it solicits investors, though). Here are further Flynn-isms from his blog regarding this week's increase in oil prices and the tendency for certain oil-rich states to use oil revenues for furthering their geopolitical interests. Then again, has it ever been different?:
By the way, something to watch out for along the lines of political engagement Flynn discusses is Putin's upcoming meeting with Dubya at the Bush family's famed Kennebunkport vacation house. I assume Bush will look into Putin's soul once more. In any case, the Hudson Institute offers some talking points, not least of which is energy:
What is the biggest threat to the world energy markets and the future security of all oil consuming nations? It is of course the “Axis of Oil". And it seems as the weeks go on the "Axis of Oil” is spinning its errors [errors? Flynn does have a way with words...] faster and faster and seems to be getting to the point where they are out of control.
Who or what is the “Axis of Oil”. Well as I have mentioned before they are the countries of
, Venezuela and Russia . Countries that are increasingly becoming intoxicated with the power of oil. The power comes from controlling all that oil and natural gas in a world that is becoming increasingly more and more dependent upon what they have or seek to steal [and I thought I was cynical]. Iran
This week two members of the “Axis of Oil” -
and Russia - were especially active and transparent so the world can see their true colors. Venezuela nationalized their oil industry and kicked all Venezuela oil interests out. US is doing their best to do the same. They want to use oil not only as an economic tool but as political weapon. It was a bad week for those who care about freedom, free markets and the future security of oil and gas for consuming nations. Russia
The most obvious assault on the rule of law and the security of the world's oil supply was the strong arm tactics used by Hugo Chavez to force US and Canadian oil companies out of
. And now Mr. Chavez is hinting that he wants to pursue nuclear weapons. Venezuela
and the errors they've made with oil and natural gas have been well documented. Putin, like Chavez, has little regard for the rule of law and the first sign that things were not all right with Russian President Vladimir Putin was when he took over YUKO’s. Then Russia started squeezing out Shell and BP from large oil field projects. Now Russia wants to lay claim to all the oil. Russia
is even laying claim to gas and diamonds to be found in the North Pole! This is impossible because everyone knows that the North Pole belongs to the great man himself...Santa Claus! But a report from the Daily Mail says that the Russian President and his scientists claim that an underwater ridge near the North Pole is really part of Russia’s continental shelf. I guess it's kind of the same way Saddam Hussein used to think Russia was part of Kuwait . Iraq
This is another disturbing development from the Axis of Oil and very bullish factor the entire oil complex. Once again while the US Congress sits idly by our economic future is being divvied up and exploited by the “Axis of Oil”. Is anyone in
paying attention? Washington
On the eve of the Bush-Putin summit meeting in Kennebunkport, four members of a Russian-American study group organized by the Hudson Institute said today that the present Russian regime is moving toward “a durable system of anti-Western authoritarian rule” and called on the U.S. to counteract this tendency by demonstrating strict fidelity to democratic principles.
Zeyno Baran, a senior fellow at Hudson, Evgeny Kiselyev, a well known Russian radio and television personality, Richard Pipes, a professor emeritus of Russian history at Harvard, and David Satter, a senior fellow at Hudson and research fellow at the Hoover Institution at Stanford said in the joint statement that “Russia is reverting to patterns of behavior characteristic of the Soviet Union.”
The four were members of a seven member group that also included Mikhail Delyagin, the director of the Institute of Globalization Studies in Moscow, Andrei Piontkovsky, a visiting senior fellow at Hudson, and Lilia Shevtsova, a senior associate at the Moscow Center of the Carnegie Endowment for International Peace.
The joint statement made the following recommendations:
• The U.S. should not reach agreements with Russia at the expense of third countries, in particular, former Soviet republics because such bargains would only open the way to “new and more outrageous demands in the future.”The statement emphasized that, with the destruction of independent centers of power in Russia, the regime is actually fragile and the internal struggle for power opaque and uncompromising. Under these conditions, it is important for the U.S. to expand and preserve its moral capital with the Russian people.
• U.S. – Russian relations should be based on complete frankness. Self censorship on the part of the U.S. has not induced Russia to moderate its international behavior.
• The U.S. and the European Union should develop a strategy to prevent Russia from using energy as a political weapon, including measures to protect against the consequences of a sudden cutoff of supplies.
• The U.S. should take the commitments on the rule of law and human rights that Russia undertook in order to gain access to Western clubs like NATO, the G-8 and the Council of Europe seriously. In the event of flagrant violations, Russia should be expelled.
• The U.S. should strengthen contacts with Russian civil society, encouraging exchanges and expanding broadcasts.
• The U.S. should emphasize to Russians that, although it supports democratic institutions, the core of the U.S. position is support for moral values. This means opposing criminality, corruption, the assassination of political opponents and the reckless waste of lives in hostage situations.