Market Report: Crude Rises Amid Geopolitical Tensions
Last week it was all about the Fed and unemployment. Who is the largest exporter of goods in the world? If you said Germany, you would have been right last week. China lays claim to the title of world's largest exporter this week. And this comes against a back drop of record crude imports hitting a 21.26 tons in December, setting the stage for an early energy rally. Now add to that the fact that the Nigerian Rebels are back at it and rising tensions surround Iran and it is a good morning to buy oil. Still, despite the breakout and the buy happy Monday morning attitude and the frosty global temperatures, oil is coming into some major resistance up around the $85 a barrel area.
Buy anything from China lately? China's exports rose 17.7% in December hitting a whopping $130.7 billion during the month, bringing the full-year export figure to $1.20 trillion. Yet at the same time China's growth being fed by a steady dose of government spending saw its budget surplus get squeezed. Despite these impressive numbers, it may cause some issues down the road. The pressure on China to allow their currency to float as the peg, gives them an unfair trade advantage over its competitors. China's government may fear a bit of a bubble as the surge in activity could cause some imbalances.
Those Nigerian rebels are back. Over the weekend Chevron Corp was hit by the rebels shutting down some production in Nigeria's Niger Delta. This is the first successful sabotage since a militant ceasefire last summer. There were reports of shots fired as early as this morning.
Will there be sanctions on Iran? There are growing signs that they may be closer to happening. Dow Jones reported that Swiss commodities trader Glenore has cut off gas supplies to Iran. That comes after General Petraeus said it would be irresponsible to not consider military action and making plans for a whole variety of different contingencies. He also said that Iran's nuclear facilities are not bomb-proof and would not comment about rumors Israel may launch a strike against them. Iran's President Mahmoud Ahmadinejad said on further U.N. Security Council sanction will not make Iran back off one iota from pursuing its nuclear program.