What Does The Iranian Election Mean For Oil Prices?

A conservative win in the Iranian election sent crude
futures to a new record intraday high of $60.95. It was the third straight rise
for crude and the highest close ever at 60.54. The new Iranian president,
Mahmoud Ahmadinejad, said he favors domestic companies to develop Iran’s oil
reserves, the world’s second largest. Traders are speculating this may mean
slower increases in output. Others wonder if Iran’s oil output may have peaked.
The new president also plans to pursue a nuclear energy program, potentially
further heightening tensions with the U.S.

The FOMC meets this week, on Tuesday and Wednesday. Economists are looking for a quarter point
rise–to 3.25%–and no major change in the policy statement. Specifically, the
words “accommodative” and “measured pace” are expected to remain intact. It is
also quarter end and half-year end.

A second U.S. case of Mad Cow disease was confirmed on
Friday.
The cow did not enter the food chain,
according to the USDA.
Cattle ended mixed; the
report came out after cattle closed. Austria recorded its second case as well,
and bird flu was detected in northeastern Japan.

The German business climate improved in June, with the Ifo
Institute’s index rising to 93.3 from 92.9 in May. It was the first broad gain
in five months; the soft euro was seen has helping exports. The euro has fallen
about 11% this year.

T. Boone Pickens said he sees gasoline reaching
$3/gallon within a year.

Brice Wightman