Ann: Second Eagle Ford Well , page-24

Interesting article in the UK Sunday Times by Irwin Stelzer ("American Account") entitled "Oil addiction puts us at the mercy of our enemies".

It is comment on the general situation for oil from the US viewpoint - not the trading position at a point in time of Golden Slops.

First: Iran is flexing its muscles and rallied support to defeat the Saudi proposal to increase production an unusual and humiliating defeat of the normally dominant voice at OPEC meetings. From the US perspective, the Saudis are friends and the Iranians are foes.

Second, the Shias (who run Iran and who may be in the minority in Saudi dominated by the Sunnis) mostly reside in the Saudi oil producing areas. And they have been making their voices heard over the recent months.

Third, Barak Obama is tending towards green and is allowing "his environmental regulators to propose rules that paralyse potential investors in coal-based energy facilities" He also promised in his presidential campaign "...to prevent the opening of the Yucca Mountain storage facilities for nuclear waste, without which key utility executives say they will not build new nuclear plants..."

Fourth, in Europe, anti-nuclear sentiment has caused Germany to shelve nuclear plans. We have yet to see what happens in France but it's not popular in the UK and the Chancellor has just stuffed North Sea exploration with a supertax, making Europe more dependent on Russian gas.

Fifth, whilst there might be a reduced rate of expansion of the economies in India, China, Indonesia etc, they are still expanding at a rate that would scare our central banks into dampening measures. And Japan definitely has lost faith in nuclear.


So, adding all that up, Obama is busy eliminating the competition for our product in the US, control of global prices is moving progressively from US allies to US foes and indifferent nations, Europe is becoming more dependent on Russia for gas, and the Saudis may have to use military might to keep control of their oil installations (but may not be able to prevent sabotage).

Make up your own minds about whether shale gas has a future in the US. Perhaps bicycles will become more popular. But don't listen to Golden Slops - they're just talking their book and fleecing the market, which is what they do best.

Moderate volumes over the last few trading days suggest selling to buy back at lower prices. When it turns, the scramble could get vicious. I'm in the wrong time zone to monitor the share, hence my stance.