As US Enters Najaf, World Oil Market Worsens
As a shout out to commenter Rob Salkowitz and our own Pessimist earlier today, who both took issue with the notion that the Saudis could really do anything to bring down the price of oil by simply indicating their willingness to pump more crude, I give you this. Apparently, the world market opened Thursday morning to the realization that the Saudis’ pledges mean little, and that due to a “perfect storm” scenario in oil producing regions around the globe, we are plainly screwed.
"Everything's gone wrong in the oil market recently. If you wanted to paint the worst scenario picture, you couldn't do much better," said David Thurtell, commodities strategist at Commonwealth Bank of Australia.
Adding to those worries, an overnight agreement between the al Sadr militia in Najaf not to sabotage the Southern Oil Company pipelines in Basra will likely be scrapped now that the US and Iraqi security forces have decided to go into Najaf in the last hour. As a side note, notice the split between Prime Minister Allawi, who apparently authorized the Najaf attack, and Iraq’s interim Vice-President al-Jaafari who wants the US out of the city.