Letter from Ahmadinejad of Iran to Bush of America:
"Just Wanted to Say Hello"
By Dr. Duru written for One-Twenty
May 8, 2006
Oil futures gapped down today after word of a potential ease of tensions between Iran and the United States. The evidence was embodied in a mysterious letter from President Ahmadinejad to President Bush that marked the "first literary work" from Iran to the U.S. in almost thirty years. I had to look a little closer at what actually happened today because oil rallied and closed down by just a few cents per barrel. I guess the market finally realized it had no clue as to the true significance of the letter. For all we know, Iran was just checking in with Bush, exchanging some pleasant hellos, and reminding him that Iran will continue to toy with the psyche of the oil markets. I was even more intrigued to see and hear speculation that oil may finally have seen its peak, that oil may even go back down as far as the mid-60s (from CNBC's "On the Money"). Huh?!? Will such a move break the overall downtrend? No. Not one bit. Did Iran and the U.S. just sign a peace treaty? Not even close. The U.S. has not even officially acknowledged the receipt of Iran's letter of love, and various Iranian government officials tried to make clear that the world of public opinion should not interpret this letter as a softening in Iran's stance. So, hold your horses everyone. The media was just looking for a story and hopped on the bandwagon to explain another whipsaw day in the oil trading pits.
We should read this instant willingness to believe in the coming relief from high energy prices as more evidence of the reluctance to accept the persistent up-trend in these very same prices. I will admit I was too eager in abandoning my "contrary" thesis that oil was due for a sharp correction, but I am definitely not eager to call an end to higher oil prices here. Amazing that some people are even willing to quickly forget that the peak driving season in the U.S. starts in a mere three weeks and another hurricane season starts soon thereafter. Should we be concerned? Hmmm....American motorists have barely slowed down their consumption of gas even as prices have marched onward and upward. Hmmm....insurance companies are bailing on covering residents in Florida for hurricane damage....'nuff said.
As always, be careful out there!