New York, NY -- (SBWIRE) -- 07/06/2012 -- According to Keith Johnson of the Wall Street Journal, sanctions against Iranian oil sales are initiating this week, with the European Union's embargo starting in full on July 1st, after the American sanctions which just began on June 28th.
Johnson also mentions that he would expect higher oil prices, except for the weak economy, and the massive supply that Saudi Arabia is bringing to the market to the tune of 1 million barrels per day.
Peter Leeds, penny stock analyst, author of "Invest in Penny Stock," [John Wiley & Sons] and publisher of the Peter Leeds penny stock pick newsletter, has been watching the situation. "It will be difficult for the sanctions to have any effect whatsoever," mentions Leeds, "when China is buying more than half of all the oil they use from that region of the world, and much of it from Iran directly."
"There is little incentive for Iran to change their ways, since they can just keep selling oil to China by the hundreds of thousands or barrels at a time."
Speaking on the currently low prices for oil, Leeds cites two reasons why the commodity doesn't cost more right now, especially in the face of the looming sanctions. "The global economy, led by Europe, is very weak right now, which implies greatly decreased demand for oil. At the same time, Saudi Arabia is breaking all their former records and aggressively pumping nearly 1 million barrels per day into the open market. This supply is massive, especially during a time when the global economy seems to be slowing down."
Leeds, along with his full penny stock pick analysis team, watch oil prices closely, as well as global events, to uncover opportunities in their penny stock pick research. "If the sanctions push prices higher, and that creates a compelling penny stock value, that particular penny stock might become our next Hot List penny stock pick."
Leeds mentions that neither he, nor any of the members of his penny stock team, have ever accepted any payment or bribe in any form for the penny stock companies they research and profile. He states that they have never, and never will, accept any remuneration before, during, or after their analysis into the penny stock companies and penny stock picks they publish.
Asked what's next for oil, Leeds suggests that prices may slowly and gradually rise from these levels. "Generally there is a risk premium on oil prices, which is an influence beyond supply and demand. The potential for war between Syria and Turkey, tensions heating up between supplying nations, possible retaliations against the sanctions... all should inflate that risk premium. Right now we're seeing tons of supply, decreasing demand, and almost zero risk premium. Over the summer, we're expecting oil prices to slowly increase, in lock-step with a return to demand, and a growing risk premium as global events play out."
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