Oh, good, let’s get Iran involved with Russia.

Other Markets: The Oct NYMEX crude oil contract opened at $121.55 on Friday, near the high of $121.86, but then fell to an intraday low of $114.18 and closed near the low at $114.59. As noted above, this was a huge one-day high-low move and the close is down $6.59 from the close the day before ($121.18). The price of oil doesn’t account for everything that happened to the US Dollar on Friday but it gets the lion’s share of the credit.

However, this morning oil traded up to $115.80 on news that Russia is supporting two breakaway provinces on Georgia, with the Russian Parliament's Upper House voting unanimously to recognize the independence of South Ossetia and Abkhazia. These are the two regions that got Russia involved in the first place. Meanwhile, the Baku-Tbilisi-Ceyhan pipeline, which runs through Georgia, resumed operations, so that’s a bit of an offset. Bloomberg reports that “Azerbaijan sent oil to export via Iran because of the disruption, and Iranian Oil Terminals Co. received the first cargo for transit yesterday, according to the Iranian Oil Ministry's news agency, Shana.”

Oh, good, let’s get Iran involved with Russia.

One interesting piece of oil news is a report from the FT saying that “China’s state-owned oil companies are likely to stop imports of refined products such as diesel and petrol next month after a nine-month buying spree that has left stockpiles overflowing, one of Asia’s largest refiners said. [A trader] confirmed market expectations of an imminent end to a buying binge from Sinopec and PetroChina that has supported refining margins in the region but has been suspected of being out of line with end demand.

“Industry experts have attributed the buying binge to political orders to refiners to avoid shortages during the Olympics. The import wave had been boosted by tax rebates granted to Sinopec and PetroChina for imports of refined products. However, much of the imported petrol and diesel has been stockpiled rather than consumed. “The state refiners’ stockpiles are so full that they have been reselling the stuff,”

Bye for Now

Barbara Rockefeller

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