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Walk Like an Egyptian

Mohamed Soliman (editor), Eye Inside Films
The Egyptian Revolution: January 25, 2011
Freedom and Dignity

The day of rage. A complete compilation of all the days of the protest.
(1 February 2011)

Oil falls on unfounded Egypt report, profit-taking

Robert Gibbons, Reuters
Oil prices fell nearly 2 percent on Friday after an unfounded report about a possible announcement from Egypt set off speculation that President Hosni Mubarak could step down shortly, sparking profit-taking from which the market failed to recover.
(4 February 2011)

U.S., Europe Safe Havens in Crisis

Dave Kansas, Wall Street Journal
Civil unrest is spreading across the Middle East, raising concern among investors about what will happen next.

When things happen in faraway places, it is difficult to figure how they will affect markets closer to home. Sometimes these events can scare the market, but they are usually short-lived. … Unlike the Asian crisis of the late 1990s, the Middle East protests are political.

… From the Maghreb of northern Africa to the Levant of the eastern Mediterranean to the Arabian peninsula, protests and unrest are unfolding in varying shapes. Even as far away as China, the government is restricting access to news about the popular movements, perhaps fearing the contagion could reach them.

“What is so important about the disturbances [in Egypt] is that they appear to have originated because of what happened in another country, Tunisia,” Jim O’Neill, chairman of Goldman Sachs Asset Management, wrote in a recent report. “So, observers have to consider not only how this will develop in Egypt, but whether it will provoke similar protests in other countries around North Africa, the Middle East, and indeed, elsewhere in the world.”

… Egypt and Tunisia alone aren’t large economic players. The economy of larger Egypt is the size of Missouri’s. But the risk is that events will spread, leading to instability across the region.

The biggest impact will likely come in the oil markets. Egypt controls the Suez Canal, a key chokepoint for oil shipments coming from the region. While Egypt itself isn’t a big oil player, the Persian Gulf countries are. If popular unrest reaches those places, oil prices would likely jump sharply higher.

Already, West Texas intermediate crude oil has flirted with $90 a barrel and Brent crude, traded in London, has made moves above $100 a barrel, their highest levels since 2008.

Higher oil prices lead to higher energy costs, which can crimp consumer spending on nonenergy items. Since consumer activity makes up nearly 70% of U.S. economic activity, a severe spike in oil prices would have negative implications for the nascent economic recovery and could stoke inflation. The oil embargo of 1973 led to a jump in oil prices and stagflation — inflation combined with anemic economic growth and high unemployment.

Nobody is credibly forecasting that kind of scenario right now. Some even think the protests could lead to economic and political reform that might ultimately help the region and the global economy.
(6 February 2011)

We All Helped Suppress the Egyptians. So How Do We Change?

Johann Hari, Independent/UK
Very few British people would beat up a poor person to get cheaper petrol. But our governments do it all the time. Why?

The old slogan from the 1960s has come true: the revolution has been televised. The world is watching the Bastille fall on 24/7 rolling news. An elderly thug is trying to buy and beat and tear-gas himself enough time to smuggle his family’s estimated $25bn in loot out of the country, and to install a successor friendly to his interests. The Egyptian people – half of whom live on less than $2 a day – seem determined to prevent the pillage and not to wait until September to drive out a dictator dripping in blood and bad hair dye.

… But the discussion here in the West should focus on the factor we are responsible for and can influence – the role our governments have played in suppressing the Egyptian people. Your taxes have been used to arm, fund and fuel this dictatorship. You have unwittingly helped to keep these people down. The tear-gas canisters fired at pro-democracy protesters have “Made in America” stamped on them, with British machine guns and grenade launchers held in the background.

Very few British people would praise a murderer and sell him weapons. Very few British people would beat up a poor person to get cheaper petrol. But our governments do it all the time.

… The former Labour MP Lorna Fitzsimons spoke at a conference for Israel’s leaders last year and assured them they didn’t have to worry about the British people’s growing opposition to their policies because “public opinion does not influence foreign policy in Britain. Foreign policy is an elite issue”. This is repellent but right. It is formulated in the interests of big business and their demand for access to resources, and influential sectional interest groups.

You can see this most clearly if you go through the three reasons our governments give, sometimes publicly, sometimes privately, for their behavior in the Middle East. Explanation One: Oil. Some 60 per cent of the world’s remaining petrol is in the Middle East. We are all addicted to it, so our governments support strongmen and murderers who will keep the oil-taps gushing without interruption. Egypt doesn’t have oil, but it has crucial oil pipelines and supply routes, and it is part of a chain of regional dictators we don’t want broken in case they all fall taking the petrol pump with it. Addicts don’t stand up to their dealers: they fawn before them.

There is an obvious medium-term solution: break our addiction. The technology exists – wind, wave and especially solar power – to fuel our societies without oil. It would free us from our support for dictators and horrific wars of plunder like Iraq. It’s our society’s route to rehab – but it is being blocked by the hugely influential oil companies, who would lose a fortune.
(4 February 2011)

Clinton rings alarm bells about Middle East – oil reserves that were running out

Jonathan Marcus, BBC
The dramatic events in Egypt and the wider Middle East have inevitably overshadowed the meeting of policy-makers gathered at the annual Security Conference here in Munich.

… Mrs Clinton rang loud alarm bells about problems in the Middle East as a whole, and not just in Egypt.

“The region is being battered by a perfect storm of converging trends,” she said.

Youth unemployment – especially among the better educated – along with new forms of networked communications, depleting resources, dropping water tables and oil reserves that were running out, all meant that “the status quo was unsustainable”.

On the vital question – should Egypt’s president stand down now – she remained silent.
(5 February 2011)
Recommended by EB contributor Michael Lardelli who writes;
“Hillary Clinton has openly spoken about oil depletion in the Middle East!! Is this a first for the US government?

Of course, nobody mentioned the silent spectre of population growth that underlies this. Egypt’s population growth rate is the same as Australia’s and will see a doubling of people in 30 years while their resource base is already collapsing.”

Egypt and the Global Oil Market: Geopolitics Is Back

Matthew Hulbert, The Globalist
If any further evidence were required that we are back in a bull oil market, then Egypt has done the trick. Benchmark prices surpassed $100 per barrel directly on the back of political turmoil in Cairo.

This is not because Egypt sits on much oil, but because its Suez Canal is a crucial transit route for getting Middle Eastern oil to global markets, and because it is home to the Sumed pipeline linking the Red Sea to the Mediterranean.

If either of these routes were to be closed, oil tankers would be diverted 6,000 miles around the southern tip of Africa — taken in conjunction, that amounts to over two million barrels per day of oil, equal to around 2.5% of global supplies, slipping offline.

A classic case of price movements linked to fundamentals, then? Perhaps. But when we consider that excess supplies still top five million barrels per day from OPEC alone, the scenario becomes a little more circumspect.

We all know that speculation plays a hand in oil prices, and commodities have undoubtedly been driven up by rabid asset rotation of late. However, the critical point is that geopolitics is “back” for the market — and it will be back with a vengeance in a $100 per barrel world. Buckle up — the ride is about to get bumpy.
(4 February 2011)
Recommended by Jan Lundberg of Culture Change who writes:
“This article helps one understand more fully the speculation factor in the oil market, taking into account current geopolitical pressures and scenarios. The writer’s speculating is in the same vein as my oft stated ideas on oil shortage’s causing possible petrocollapse (if extreme enough, such as Strait of Hormuz failure).

But this writer ignores two huge issues: (1) Peak oil reality and (2) what can happen when his worst case price movement occurs. He seems to only think of economic growth or the lack of it, or whether there will be a repeat of 2008 prices. Population size seems to not exist in his analysis.

The author’s online publisher is essentially about this: “The Globalist’s executive briefings are designed to meet the global information needs of senior executives in corporations, associations, international organizations and government agencies worldwide.”

Arab World’s Turmoil May Spell Sudden Petrocollapse

Jan Lundberg, Culture Change
… The number of separate but linked oil facilities, extent of damage, or days of closure do not have to conform to some arithmetic model for there to be a massive reaction in the world oil market. The perception of supply shortage, with real instances affecting deliveries, is what drives oil prices on the world market, much as the stock market sometimes has a herd mentality. So far we are talking about what most observers would consider a temporary oil supply disruption resulting in a price spike. However, if the disruption and spike are strong enough, severe effects can shut down much of the global economy and simultaneously stop much local activity. Petrocollapse — the exacerbated and lasting failure of the world oil market to meet demand, and the paralysis and collapse of most of the economy’s infrastructure relying on petroleum — does not need to follow a formula or specific pattern of oil industry breakdown or a certain depletion schedule of oil reserves. We will only be sure when petrocollapse hits. Because peak oil has been attained, we can say that the petrocollapse process has begun and just needs a catalyst to tip the whole economy and trigger famine on a scale as large as some future climate disaster.

I don’t believe the “Transition Town” or less-known “Stair-case slow collapse/catabolic” viewpoints take into account adequately the extreme vulnerability of and to the oil market. The Transition Town and Stair-case adherents’ views, hopes, dreams and assumptions may actually refer to social change from civilization collapse, when they may think they are referring to the post-peak oil downslope, or vice versa. But this may make no difference as events may accelerate, and collapse and die-off throw theory and wishes out the window.

In my oil analysis career at Lundberg Survey, we accurately predicted the Second Oil Shock based on our finding that in March 1979 there would be a 9% (nine percent) shortfall of gasoline for U.S. demand. It was a time of billions fewer humans and rising oil production (extraction). The world also seemed poised to follow through with stringent conservation and development of alternative fuels. After Jimmy Carter’s failure to catch fire with those strategies, energy efficiency actually reversed direction with the SUV phenomenon. But any slight per capita gains, had they been consistently in the right direction for conservation, are offset anyway by growth, while efficiencies paradoxically end up adding to more consumption.
(31 January 2011)