Well Iran's big announcement is tonight. The one that will "show the Western World". I don't know what it will be but most likely it will be much ado about nothing. Could be more about their enrichment program, some comment about new weapons or some bragging about their nuclear program.
Clearly the market thinks there is a chance that it is something as oil closed up .70while almost everything else closed down. Furthermore, the oil term structure indicated concern about a near term event with front month oil up $.70 while back months were only up $.15. This means today's move was not just a bounceback from Euro related fears (which have tended to impact oil prices equally all along the curve)
Israel also thinks the annoucement could be something as they went to the trouble to send a surface ship to the Red Sea (Persian Gulf?) a couple of days ago. If the Iranians are going to do something significant, it makes sense to send intelligence gathering assets to the area. Israel has very limited electronic surveilance capabilities so they probably need to send a ship to the area to augment their capabilities ahead of a potential event. The USA, Russia, UK etc. already have assets on station in case something goes down.
One possibility that is not being discounted by the market: If Iran does a nuclear test, expect all hell to break loose tomorrow. No one is discussing it, and it is possible. It would be very foolish on the Iranians part but it could happen. If it does, then oil is going higher. An Iranian nuke test will put a real geopolitical premium in oil prices as it will make war quite likely.
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