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However if you look at InTrade's contract on the probability of an Israeli attack on Iran by end 2012 the implied probability has fallen quite sharply since mid-February by 10% to 40%. Yet the oil price (Brent) has stayed stubbornly high around $125 per barrel.
See chart on my blog here http://materials-risk.com/
Although I believe concern over Iran has focused traders attention on the tight supply fundamentals I think it is easy to get drawn into the 'tail risk' scenario. The US war simulations reported in the NYT highlight this fact with the potential for a much wider regional conflict if Iran is attacked.
However I do wonder whether investors / businesses have become numb to the latest developments in Brussels/Athens as the crisis has seemingly stretched on and on. I think that the latest bailout and action by the ECB are still just aiming to buy time and it wont be long before a third much bigger bailout is required as unrest intensifies later in the year.
On the Middle East I think Thursday's market reaction to news of a pipeline explosion in Saudi Arabia is telling, in that I would expected a much sharper price increase given the supposed nerves in the market. I personally think the Iran risk premium in the current crude price is a very small component of recent price increases.
On China the January trade data and also electrical production were very suggestive towards a sharper slowdown. However recent PMI data has been much more supportive of China maintaining relatively strong growth. What concerns me about China is not so much this year but later on in 2013/14 when the country's bad loans are likely to catch up with it.