Make These Moves Before the U.S. Hits Syria

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From the Editor: You're getting special access to Bill Patalon's latest Private Briefing because the situation in Syria is escalating by the hour, and a U.S. strike would have a significant and immediate impact on stocks, but an even bigger impact on oil. So Bill called the one man who'd know exactly what to do…

Oil prices have been surging on fears that the Obama administration is planning to punish Syria for using chemical weapons against its own people.

But the real question is whether this escalation in "black gold" prices is going to continue.

As we'll see in a minute, our in-house energy expert – the noted Dr. Kent Moors – believes that oil prices are headed much higher.

And he has lots of company.

Oil prices hit their highest levels in two years yesterday after NBC News reported that the Obama administration is "past the point of [no] return" because of reports that Syria used chemical weapons against its own people.

And that means that military strikes against Syria could occur "within days," the network reported.

West Texas Intermediate (WTI) crude rose to nearly $110 a barrel, its highest level since May 2011. And Brent crude – the global benchmark – hit a six-month high north of $117 a barrel.

Whether this energy-price surge keeps going, of course, is dependent on how hard the U.S. hits Syria – as well as what happens afterward.

But there's a growing belief that oil prices are fated to climb much higher before this latest global mess is resolved.

LandColt Capital's Todd Schoenberger grabbed some headlines yesterday when he said on Yahoo! Finance's Breakout program that a protracted conflict in Syria will cause oil prices to challenge their 2008 record highs of $147 a barrel – creating an energy price spike that, not surprisingly, would kill the European "recovery" before it reaches sustainable status.

That will be great for energy investors, as well as for gold prices, he said.

Looking back, you can see how we got to this point.

Syria was under "emergency law" from 1963 to 2011 – a move that essentially crushed constitutional protections for the country's citizens.

But that changed with the "Arab Spring." Since March 2011, the Syrian Arab Republic has been involved in a bloody civil war – ignited by uprisings that experts say were inspired by the regional revolts against oppressive regimes pundits called the Arab Spring.

Uprisings against Syrian President Bashar al-Assad and the neo-Ba-athist government have turned into a bloody series of engagements that culminated with last week's alleged chemical attacks that reportedly left hundreds dead in the Damascus suburbs.

The Obama administration is said to be looking at launching air strikes or cruise-missile attacks that would keep Syria from again using chemical weapons (considered a "weapon of mass destruction," or WMD). But Washington wants to avoid having Damascus retaliate in a way that escalates the conflict and perhaps leads to a broader war in the Middle East.

For instance, there are very real worries that Syria or that country's allies might then attack Israel. That would force Israel to retaliate, bringing the Jewish state into the conflict and putting the United States into a very tough spot from the vantage point of Middle East diplomacy.

And with many experts believing that President Assad will be able to "ride out" U.S. reprisals that are limited to air strikes, there are worries that U.S. President Barack Obama might consider an even more concerted – and prolonged – attack on Syria.

Any kind of escalation will roil the financial markets. Mike Wittner, global head of oil research at Societe Generale, told clients that a spreading conflict could easily drive Brent crude up to $150 a barrel.

"Our big worry is Iraq," Wittner wrote. "The Sunni vs. Shiite conflict in Syria has a direct parallel in Iraq, and the violence in Iraq has reached levels not seen since 2008. Iran, who is Syria's only state ally in the region (Syria is also allied with Russia and with the Lebanon-based Hezbollah militant group), may choose to stir up…attacks [on oil production and transport facilities] in order to hurt the economies of the Western countries by causing an oil price spike."

Kent, who runs our Energy Advantage advisory service and is our resident energy expert here at Money Map Press, also happens to be one of the best-connected insiders in the world energy sector today. He says investors should prepare themselves for the volatility and continued surges in energy prices that will result from any prolonged conflict.

And he also made an excellent point that I haven't seen many of the other "experts" zero in on: It's not enough to just remove Syrian President Assad: There also has to be a plan to somehow fill the leadership "vacuum" that will result from his ouster.

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About the Author

Before he moved into the investment-research business in 2005, William (Bill) Patalon III spent 22 years as an award-winning financial reporter, columnist, and editor. Today he is the Executive Editor and Senior Research Analyst for Money Morning. With his latest project, Private Briefing, Bill takes you "behind the scenes" of his established investment news website for a closer look at the action. Members get all the expert analysis and exclusive scoops he can't publish… and some of the most valuable picks that turn up in Bill's closed-door sessions with editors and experts.

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  1. Werner | August 30, 2013

    The British are apparently unwilling to repeat Blair's stupidity to get involved in a Mid-East war unleashed by the US president with insufficient prove of who actually used chemical weapons. Obama has got no authority to go to war as things stand now. Why should the US get involved in another inter-muslim conflict and put US sodier's life at risk. Again, the price would be paid by the regular citizens, not the politicians!

    • Gizwaldo | September 3, 2013

      The British have only declined Cameron because not enough of the Lords were bribed this time around.
      Which makes me think that this whole saga is all just sabre-rattling to get those oil prices higher.
      There is no way that they will be able to send air strikes over the heads of the Russians sitting off the Syrian coast with a nuclear armed cruiser included.
      Unless of course they actually want to provoke the unthinkable…

  2. Robert in Canada | August 30, 2013

    It is illogical to think Syrian gov't used chemical weapons on such a small scale knowing:

    1. They wouldn't gain any military or strategic advantage from it.

    2. Using chemical weapons after Obama's warnings would force Obama to attack.

    I think Russia is right on this one – they say chemicals were used by rebels against their own people to force the US to attack the Syrian gov't.

  3. yngso | September 7, 2013

    If it´s true that the Russians also have war ships in the Mediterranean now, a US strike iss less likely. Even the Soviet Union used to cooperate with the US in order to prevent WW 3…-But I too think that tension will last and prices will rise.

  4. H. Craig Bradley | September 15, 2013

    GET A JOB- IN SYRIA

    Lets just start WWIII and get it over. I don't much care if we start a Middle East War or Iran does. If it does not happen now, it will happen later on anyway, one way or the other. Its only a matter of time so lets just get it on. War diverts the people's attention and enriches the oil companies and the defense industry, who otherwise face declining government business. The economy gets a new stimulus and we can ship our unemployed to Syria for peacekeeping duties in a canvass tent in the desert. Its the same old trick.

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