01/15/16

War Between Saudi Arabia And Iran Could Send Oil Prices To $250

The rift between Saudi Arabia and Iran has quickly ballooned into the worst conflict in decades between the two countries.

The back-and-forth escalation quickly turned the simmering tension into an overt struggle for power in the Middle East. First, the execution of a prominent Shiite cleric prompted protestors to set fire to the Saudi embassy in Tehran. Saudi Arabia cut off diplomatic relations and kicked out Iranian diplomatic personnel. Tehran banned Saudi goods from entering Iran. Worst of all, Iran blames Saudi Arabia for an airstrike that landed near its embassy in Yemen.

Saudi Arabia’s Sunni allies in the Arabian Peninsula largely followed suit by downgrading diplomatic ties with Iran. However, recognizing the dire implications of a major conflict in the region, most of Saudi Arabia’s Gulf State allies did not go as far as to entirely sever diplomatic relations, as Saudi Arabia did. Bahrain, the one nation most closely allied with Riyadh, was the only one to take such a step.

Many of them are concerned about a descent to further instability. Nations like Kuwait and Qatar have trade links with Iran, plus Shiite populations of their own. Crucially, Qatar also shares a maritime border with Iran as well as access to massive natural gas reserves in the Persian Gulf. These countries are trying to split the difference between the two belligerent nations in the Middle East. “The Saudis are on the phone lobbying countries very hard to break off ties with Iran but most Gulf states are trying to find some common ground,” a diplomat from an Arab country told Reuters. “The problem is, common ground between everyone in this region is shrinking.”

The effect from the brewing conflict on oil is murky, but for now it is not having a bullish impact. In the past, geopolitical tension in the Middle East, especially involving large oil producers, would add a few dollars to the price of oil. This risk premium captured the possibility of a supply disruption into the price of a barrel of crude. However, recent events barely registered in oil trading. That is because the global glut in oil supplies loom larger than any potential for a supply disruption. Oil dropped to nearly $30 per barrel on January 12 and oil speculators are not paying any attention to the tension in the Middle East. Also, the conflict could simply manifest itself in an intensified battle for oil market share. Iran has put forth aggressive goals to ramp up oil production in the near-term. And Saudi Arabia continues to produce well in excess of 10 million barrels per day while discounting its crude in several key markets, particularly in Europe in order to box out Iran.

But what if the current “Cold War” between Saudi Arabia and Iran turned hot?

Saudi Arabia has a variety of reasons to not back down, not the least of which is the very real sense of being besieged on multiple fronts. An article in The New Statesman by former British Ambassador to Saudi Arabia, John Jenkins, clearly laid out the threats that Saudi Arabia sees around every corner: extremists at home; a growing Iran; toppled allies from the Arab Spring; low oil prices; and a fractured relationship with the United States. The nuclear deal between Iran and the West was confirmation on the feeling in Riyadh that it is becoming increasingly insecure.

Already the two rivals have engaged in proxy battles in Yemen and Syria, supporting opposite sides in those wars. A full on direct military confrontation would be something entirely different, however. It would have catastrophic consequences for oil markets, even when taking into account the current supply overhang. Dr. Hossein Askari, a professor at The George Washington University, told Oil & Gas 360 that a war between the two countries could lead to supply disruptions, with predictable impacts on prices.

“If there is a war confronting Iran and Saudi Arabia, oil could overnight go to above $250, but decline [back] down to the $100 level,” said Askari. “If they attack each other’s loading facilities, then we could see oil spike to over $500 and stay around there for some time depending on the extent of the damage.”

While not impossible, war is speculative at this point. Also, $250 and $500 per barrel are numbers pulled out of thin air, and may seem a bit sensationalist. But despite the glut in global oil production – somewhere around 1 mb/d – the margin from excess to shortage is thinner than most people think. OPEC is producing flat out and spare capacity is actually remarkably low right now. The EIA estimated that OPEC spare capacity stood at just 1.25 mb/d in the third quarter of 2015, the lowest level since 2008.

As a result, even though it remains a remote possibility, direct military confrontation between Saudi Arabia and Iran could well put oil back into triple-digit territory in short order.

Article Source: http://oilprice.com/Energy/Oil-Prices/War-Between-Saudi-Arabia-And-Iran-Could-Send-Oil-Prices-To-250.html

By James Stafford of Oilprice.com

01/15/16

Weekly Featured Profile – Glenn Scott

KeyWiki.org

Glenn Scott is a recently retired Austin TexasLabor Rep. for the Democratic Socialists of America controlled National Nurses United labor union.

In the mid-1970’s, Glenn Scott representedAustin on the National Interim Committee of theNew American Movement, an amalgam of mainly former members of Students for a Democratic Society and the Communist Party USA.

By 1981, Scott was chair of the New American Movement’s “Anti-Racist Commission.” At the organization’s national convention in Chicago that year, Scott spoke alongside Rose Brewer; Brenda Eichelberger, National Alliance of Black Feministsand Bob Niemann, LA NAM on a mini-plenary entitled “Racism and Reaganism.”

Glenn Scott New American Movement was a moderator of the day one “Unity Session” of the Democratic Socialist Organizing Committee/New American MovementUnity Conference in Detroit on March 21/22, 1982, that resulted in the formation ofDemocratic Socialists of America.

She became a leader of the new-founded Austin Democratic Socialists of America. She also served as a National Executive of the Feminist Commission of theDemocratic Socialists of America, in 1985.

After a long hiatus, Austin Democratic Socialists of America reformed in 2014 and became very influential in the Austin branch of the DSA/Communist Party dominatedTexas Alliance for Retired Americans.

Through this organization, Austin DSA has worked very closely with Austin/San Antonio congressman Lloyd Doggett, a longtime ally of Democratic Socialists of America and other Marxist groups.

(Glenn Scott|more…)

01/15/16

BUSH PROVES GOPe STUNNINGLY TONE DEAF

By Sharon Sebastian

It is patently evident that the fate of the nation lies solely in the hands of the American people. Both political parties have serious flaws.

The Democrats have become the party of Socialists and, thus, offer nothing for the future of America except dependence on government which ultimately and historically leads to iron-fisted control of the people. The get-free-stuff crowd eventually comes to the harsh reality that under Socialism the hand-outs become more and more meager as the government determines what, when and how much. The heavy burden of Socialism eventually takes its toll. Over time, it spurs a desire for freedom, self-determination and free-market capitalism as it again beats in the melancholy hearts of the down-trodden who were so eager to give up their freedom and independence. That is the future offered by the Democrat Party.

The Republican Party, by contrast, touts Constitutionally based freedoms and a free-market where the people are not constrained by a heavy-handed government, but are driven by their own energies and desires to personally succeed and grow a nation with liberty at its core. That is the future that may still be offered by the Republican Party — if it does not let its old-establishment leaders get in the way. The greater the distance by the GOPe from the nation’s founding values and ideals, the greater the rebellion from the base that is refusing to be pushed around.

The cold reality of the extent of the divide within the party came when it was reported by the Associated Press that GOP establishment Presidential Candidate Jeb Bush says that he finally “got it” in regard to the angry mood of the American people. The U.S. News & World Reports’ headline reads, “Bush tells AP he misjudged intensity of anger among GOP voters before his White House campaign.” Though his campaign is most associated with the old-party elites, Bush is not alone in that potentially terminal disconnect.

The old dogs of Capitol Hill, too long cushy in their jobs, now fear the new bloods that look to turn them out into the streets. The GOP establishment (GPOe) has been amply and repeatedly warned about neglecting the concerns of its constituency.

An example of such a warning is an article I wrote, “The Spine of the GOP,” on May 3, 2011, citing what amounted to years of desertion by the GOP establishment. The initial outsiders became the conservative and moderate voters within the party. Governor Bush confirmed what middle America has long known, elitist Republicans — who also hold disdain for so-called outsider Republican candidates in the race of for the Presidency — had become increasingly detached. They were more immersed in retaining power and control than in serving the people.

Consider that the following article was written as a warning to the GOP establishment five years ago. With some ironic déjà vu, note that Donald Trump was also in the aim and was the bane of the GPOe back then. The mood of the electorate was souring with the American people already fed-up with promises not kept by elected officials.

“The Spine of the GOP,” by Sharon Sebastian, May 3, 2011 —

“Myopically, Republicans are asking themselves – why are voters swooning over Trump?

Republican voters began feeling disenfranchised in 2005-2006 when core conservative principles were discarded by a GOP in search of the independent and liberal vote. The outcry of being constituents without representation rang true in conservative circles. Unwarranted spending sprees and unprotected borders had dire consequences for the GOP in 2008 as liberals swept the vote. Once burned, voters today warn that a GOP that compromises values, rights and freedoms could mean the death knell of the party. In 2010, after two harried years of Barack Obama, voters put the GOP on life-support, which opened the door for a fragile recovery – a recovery that relies on spending cuts, defunding Obamacare, restraints on the EPA and an end to onerous backdoor, economy-killing government regulations. The Republican Party has prospects for new life – a half-life at best – until it proves itself to be a party of leadership in defense of the Constitution, adherence to fiscal responsibility and Americans’ God-given rights and liberties.

On such unsteady ground, GOP candidates fear Donald Trump. Consensus is that the appeal of Trump is his bluntness, his unreserved frankness about the dire condition of the country and who put us there. Trump wisely acquiesced that if his joining the race as an Independent would assure re-election of Barack Obama, then he would not do it. Trump says his focus is to make certain that Obama does not see another four years in office. Trump appears to have no interest in being eviscerated by the American people as the historical spoiler who helped push the nation into its demise by aiding, inadvertently or not, in the re-election of Barack Obama.

Politicians need to know that the American people are in no mood. If politicians are sitting in Congress taking up space and enjoying top of the line benefits, free gas, and a free ride at the expense of American families, then voters are done with you. If a politician is willing through compromise to sell-out this nation’s future, voters are done with you. If a politician abuses and refuses to listen to constituents’ concerns whether at town halls or on phone calls, they are done with you. And, if politicians disregard a revival of Constitutional principles, the balancing of the budget, the guidance of the founding faith and the immeasurable sacrifice and value of our men and women in the military, voters are done with you.

The American voter is developing a fine sense of detecting political double-speak versus earnest representatives who say what they mean and mean what they say. To restore this nation, politicians with a spine, who will not back down on issues of major consequence, must become America’s future leaders. Those who leech off of this nation, as it struggles for survival, are the antithesis of our founding fathers and have become the enemy within. Though a few slipped through during the last election, serial compromisers need not apply. Whether in office or running for office, it will not be wise to test the ire of the American voter with old style GOP give-away-the-farm politics as usual.”

So, where does the nation stand five years later? That Barack Obama is the root cause of and, with determination, accelerated the failing of our nation at home and abroad is now part of history. The final chapter of his legacy is to be written in 2016 with more threats of unconstitutional executive orders. Fully aware of Obama’s goal to downgrade America under the guise of “transformation”, the established, old-guard Republicans did little to abate his executive lawlessness, and indeed aided and abetted in some cases. Such cooperation and compromise with Obama’s agenda and the unprecedented empowerment of his presidency by Congress assigns cause for America’s demise to both sides of the aisle. It bears repeating. Those in Congress that took a stand against the tide of a progressively socialistic and weakened America — those politicians with a spine who will not back down on issues of major consequence — must become America’s future leaders.

Reminiscent of the quote from the late baseball manager Yogi Berra, the warning in the article posted five years ago to the GOPe, is today “like déjà vu all over again.” That Jeb Bush just now realizes that he “misjudged the intensity of the anger of the GOP voter” confirms that which the base of the party was already sorely aware. His statement gives credence that in regard to the established Republican elites, the Constitutionally-grounded, traditional voice in the GOP was being ignored. Today, that voice is making itself heard. They refuse to remain a constituency without representation. Beyond the halls of Congress and the campaign trail, Americans will have the final say. Voting to preserve our nation is the final message that must be delivered in what is, unquestionably, a struggle for America’s future. That is the most critical warning of all.

Sharon Sebastian, author of the book, “AGING: WARNING Navigating Life’s Medical, Mental & Financial Minefields,” is a columnist, commentator, and contributor in print and on nationwide broadcasts on topics ranging from healthcare, culture, religion, and politics to domestic and global policy. Sebastian’s political and cultural analyses are published nationally and internationally. Website:   www.AgingWarning.com