As predicted by the Forex Robot team, oil has rebounded by nearly 33% since our last post.  What makes this price increase so interesting is that it coincides with so much uncertainty about the sustainability of the Euro currency. Members of Forex Robot team believed that prices would steadily increase, but not at such a quick rate. Current oil prices are hovering around $100.  Many economists and commodity experts agree that oil prices are inflated due to speculation on two primary factors.  Iranian nuclear ambitions and recent positive news from leading economic indicators on the U.S. economy. 

Iranian Nuclear Ambitions

According to recent International Atomic Energy Agency (IAEA) reports, sufficient evidence presented to the organization indicates that the Iranian government is actively and aggressively seeking a military nuclear capability.  This is the first official report by the IAEA that acknowledges what the United States, Israel, and many neighboring Arab countries have suspected all along, that Iran has a covert military program to produce nuclear weapons.  With this official acknowledgement, many countries, including the United States believe that Israel will take preemptive military actions against Iranian nuclear and ballistic missile capabilities.  

Unlike the successful strike on Iraq's  sole nuclear power plant in 1981, the Iranians have military and nuclear facilities scattered throughout the country.  In some cases, some of these facilities were built near populated areas as a deterrence against any air assault. Additionally, the Iranians have invested heavily in an advanced ballistic missile program,  This will allow the Iranian armed forced to hit targets in all areas of the Middle East, and even in Europe.  Unlike Iraq, that did not directly respond to the successful Israeli attack on its nuclear facility, Iran is expected to respond with ferocity.  The United States will be blamed for Israel's actions, and U.S. bases in Iraq and the UAE will be attacked.  This scenario will ultimately lead to a wider conflict involving Arab countries.  The end result will be extremely high oil and gas prices.  

Positive Economic Indicators for the US

According to recent economic data, jobless claims have seen an important drop.  While the number of jobs being created is sluggish compared with the number of jobs necessary for new workers, the likelihood of a second U.S. recession is becoming smaller.  This has created optimism among investors and oil traders alike.  Oil prices quickly went from mid 80 dollars to nearly 100,dollars within a few weeks.  However, the Forex Robot team believes that the problems in Europe will begin to impact trader sentiment and oil prices will once again go down.