The geostrategic oil pan's plug has been pulled

By Mark and Jesika Espinola, Boston Geostrategic Group-2000

As the PLO/Islamic movement's promoted bloody riots in the Gaza Strip and elsewhere in Israel continue the significance of the Jewish High Holy Days is being overlooked by the global media.

Ariel Sharon's visit to the ruins of the last great Jewish Temple is absolute right of any Jewish person in Eretz Yisra'el. Radical Islamic organizations coupled with Yasir Arafat's PA (PL0), used this non-issue as an excuse for rioting having always despised General Sharon because he speaks the truth about the security of Israel and he, assisted in defeating Arafat and his terrorist bands from Lebanon.

It was PLO head, Yasir Arafat, who along with his murderous army, fled to the Lebanon after attempting to topple the Hashemite Kingdom of King Hussein of Jordan in September of 1970. By 1975 the PLO had turned the Las Vegas of the Near-East, Beirut, into a sort of living hell with the civil war they started. By 1981, Israel, under Prime Minister Begin, of the conservative Likud party had had enough of Arafats terrorist attacks on Israels nothern border settlements and sent the IDF under the command of General Sharon, supported by Lebanon's Christian communities, and finaly expelled Arafat and his PLO thugs from the Lebanon they once controled and ruined.

The Israelis discovered something very ominous; the Russians were going to use PLO controled areas of the Lebanon coupled with Syrian armed forces (present controlers) as a staging ground to invade Israel from its northern border. As history now proves, it was Ariel Sharon's led IDF forces that uncovered and stopped a potential Arab/Russian invasion of Israel. One should recall Russian fighter pilots flew Syrians Migs during the Yom Kippur war of 1973 and again during the 1981-2 Lebanon/PLO/Israeli war. At that time the Russian military threat against the State of Israel was very real.

The present situation is as follows:

Even if Ariel Sharon never ventured near the so called, Dome of the Rock, Arafat's ludicrous demand that Prime Minister, Ehud Barak and the Labour Party relinguish Israeli sovereingty over Jerusalem had been rejected and he and the P.A. high command planned staged trouble for Israelis during two very important dates Jews would most desire a peaceful time with family and friends. The Labour government already surrendered Israels natural gas reservoirs and over 5 billion dollars worth of oilfields to the P.A. 'as an act of good will'. Israels energy security for the cause of 'peace' was not a wise move. It stands to reason Arafat thought Jerusalem was for sale as well.

A relevant point to ponder is the stated Islamic issue of Jerusalem being so important. The issue seems to have emerged after the Arabs lost the six day war. Prior to June of 1967 Jews were forbidden to enter East Jerusalem by the government of Jordan. Jewish gravestones were removed from Jewish cementaries to be used as floors for public Arab bathrooms. Some 'volk' from Berlin committed the same vile actions in Poland during the Holocaust.

September 30th, 2000 was Rosh Hashanah and also the Sabbath. Yom Kippur (a 1973 Arab defeat) shall be celebrated on Monday, October the 9th,2000. The advocates of radical Islam consider dates, especially Jewish High Holy days of extreme importance, thus consider the fact that the worst Arab rioting since 1948 is taking place during two of the most sacred celebrated events in Jewish history.

Now, since Arafat failed to grab Jerusalem as his capital for a PLO state, the Arab rioting is the initial step, in his sick mind, to take Jerusalem by force of arms. Israel, even under the left leaning Labour Party, would not allow Jerusalem to fall to Arafat and his cohorts.

The American public is not being informed (many do not care) of the true facts dealing with escalating Arab violence within Israel. The U.S. based mass media seems determined to try to only focus on the Presidential Election and debates between George W. Bush and Al Gore plus Firestone/Bridgestone tires falling apart.

We have stated numerous times, especially during the last year, that Jerusalem will evolve into the most paramount geostrategic issue since the bombing of Pearl Harbor on December 7th, 1941. We are on record as warning the second most dangerous geostrategic zone, in relation to disruptive crude oil price convulsions, are both, Iraq and Iran. Crude oil continues to climb upward in price as does natural gas. Wood, for wood burning stoves has soared price-wise, shooting up over 35% since last year's, rather mild winter in the North American, North-East. The high-tec heavy NASDAQ index has undergone broad dips in prices. More of the dot-com companies and computer companies such as Broadvision, Dell, Apple plus a host of others, issue statements of lay offs or low dividends or maybe none at all.

A very busy and turbulent week as the Near-East heats up once again and some of the radical, Middle-Eastern, Islamic nations are readying for battles with Israel. Iraq and Iran have made more adverse outcries against Israel while Orthodox Jews in sections of Brooklyn have been assulted and Syrian 'demonstrators' rioted outside the American embassy in Damascus. The U.S. State Department has even issued warnings to Americans abroad to exercise caution in traveling about.

If the situation relating to the status of Jerusalem escalates to the point of Syria, Libya, Iraq, Iran or other Islamic nations sending assistance in the form of soldiers disguissed as Israeli Arabs (Palestinians), the present wide-spread rioting could quickly broaden forcing Israeli retaliatary air strikes against host Arab/Islamic states.

American and Canadian heating oil and natural gas homeowners may be confronted with a harsher than average Winter for 2000-01. The real cold weather is fast approaching, leaving developed oil consuming nations, already confronted with public outcries and strikes about over taxed petro could soon be forced to pay even higher prices for energy, in the event of the current wide spread rioting turns into an all out of war.

If what we are stating here does indeed transpire crude oil prices will shoot between $50.00 and $60.00 a barrel, or more! Natural gas, propane, gas oil, heating oil, deisel fuel and unleaded gas shall also sky-rocket in price, from present highs, if there is an Arab-Israeli war. Currently, $26.00 to $33.00 a barrel, for near and far month option contracts on crude oil futures/options, a price jolt of $10 to $20 a barrel will reap enormous profits considering every penny in crude oil put (price falls) or call (price rise) options translates into $10.00 per penny. Yes, that is correct, one cent equals $10 and the same applies to natural gas in commodity options and futures contracts.

A sudden huge increase in the price of crude oil should warn wise energy group commodity traders to have put options in key positions to also profit on crude oils price decline, once the panic subsides. One should be warned that in October 1985 crude oil raced above $33.00 a barrel. By April 1986, in six months, prices plunged below $10.00 per barrel. Another crucial example of being properly positioned in both puts and calls, is the effects the Gulf War had on crude oil pricing. When Iraq invaded Kuwait in August of 1990, crude oil soared above $40.00 a barrel. President Bush's decisive response to Saddam Hussein's aggresion, specifically, Operation Dessert Storm crashed oil prices bellow $18.00 per barrel.

Even though Kuwait's oil storage tanks, pipe lines and capacity to function in the oil world was severely destroyed or disrrupted, prices crude oil from 1991 until 1996 remained between $14.00 per barrel to, no higher than $24.00 per barrel. In 1994 prices jumped from $14.00 to $21.00, a good solid $7.00 jump. This $7.00 rise and decline on the put (down) side, happned again in 1996 and 1997 which was the year crude oil began to withdraw to the Winter of 1998-99 record lows of $10.00-$11.00.

Is there going to be an October surprise in the energy markets as well as Wall Street? The way the overall economic situation seems to be heading, in terms of profit losses for high-tec stocks and petro-inflation creeping into the international economy, the last thing the average stock investor needs now is a Near or Middle-Eastern war to panic global stock, metals and energy markets in October.

Another relevant point is, of the eleven oil producing members states of OPEC only two, Venezuela and Nigeria are not declared Islamic nations. That is not much of a consolation considering the president of Venezuela, Hugo Chavez, was the first elected head of state to visit Saddam Hussein and Chavez is very Anti-American. In Nigeria's case, the president elect is not a Muslim but the northern portion of mineral rich but proverty stricken Nigeria is indeed Islamic, adhearing to Islamic law.

One thing is for sure, sustained crude oil prices of between $30 to $40 per barrel can only harm and bring about a slow down of the overall global economy. The after effects of high crude costs mean rising inflation, higher unemployment and climbing interest rates and that spells recession, that is if one recalls the last time there was a war between the Arabs and Israel in 1973. Some good advice that was given in 1974 was to keep one's gas tank filled as gasoline prices kept jumping during the 'gas shortages' and long lines at gas stations. That time of over priced petro is already enveloping E.U. nations due to massive taxation on petro, not the threat of war.

On the other hand, those of us who study, research and monitor the mechanics of what drives geostrategic commodities and stock index group options, are presently postioned for profit eventhough it is a shame gains will be made while Israel suffers. Israel shall have another victory!

Mark and Jesika Espinola
Asheville, North Carolina
U.S.A.