Energy report: Cold spell spurs bulls

I really can't sell, baby it' cold outside. I've got to go long, baby its cold outside. I’ve been hoping that the oil would rise but not so fast. The carry trade has been so nice. But the bulls may start to worry if Fed gets in a hurry. The traders will be pacing the floor as they listen to the Iranians roar. So the traders may start to scurry because they don’t want holiday worries. But perhaps just one buy more. I’d better get long because baby it's cold outside.

Cold temperatures and Iran worries put the bulls on ice. Reports are circulating that an Iranian military force entered Iraq. Bloomberg News reported rumors quoting Iraqi Border Guard General Zaser Nazmi that said Iranian forces yesterday entered Iraqi territory and occupied oil well number 4 in the East Maysan field in al-Fakah region, 450 kilometers (280 miles) south of Baghdad. The Iranian forces positioned tanks around the well. The order guard’s comments couldn’t be immediately verified independently and were later discounted. Yet the border guard said, "They positioned tanks around it and dug trenches, and they are still there, they raised the flag."

Is this chilly development for real? Is Iran going to take over an Iraqi oil field and claim it as its own? Isn’t that what Saddam Hussein did? Is Iran trying to remind its citizens what a rotten government they have by picking a fight with its long term foe? Will energy traders take a chance on being short with this type of rumor swirling over a holiday weekend? Do we need this? We have cold temperatures and a wildly bullish natural gas withdraw already conspired to turn the oil market around. It that had been under pressure in the post Fed, yet the surging gas market brought back the petroleum markets as we saw a lot of roll activity in crude from January to February.

That along with cold weather forecasts was able to overcome other more generally bearish news. News like more OPEC production tanker tracking firms that are saying OPEC production is rising. The EIA is saying that OPEC crude oil production is expected to average 29.1 million bbl/d in 2009, down more than 2 million bbl/d from year-earlier levels.

Put your earmuffs on as Iran is putting a chill in the air because baby it is cold outside!

Phil Flynn is senior energy analyst for PFGBest Research and a Fox Business Network contributor. He can be reached at (800) 935-6487 or at