For Europe this was the Christmas that almost wasn't. The refusal of ECB Chief Mario Draghi to agree to the concept of a Euro bond killed a commodity and stock rally and had traders worried that European lending would freeze up and Europe would be mired in a deepening recession. Yet Mario Draghi hopes his latest move will reinvigorate the European banks and will save the Eurozone just in time for Christmas. Yet despite early optimism the market may fear that the move may be too little too late. The European Central Bank lent 489 Billion euros for 523 euro-area banks in 3-year funding operation that hopefully will lead these banks to lend money and keep Europe out of a recession. Yet despite yesterday's big Santa rally, the market already seems to be asking Mario Santa Draghi just what else do you have to give us.

Of course with oil there are other issues that are supporting the price. Increased geo-political risk is one of the reasons oil and the products out performed many of the other commodities. Oh sure we had November housing starts that were the strongest since April 2010. Yet is the increasing risk to supply and another trouble spot on the map adding to the growing list of oil hot spot issues.

Kazakhstan is the latest hot issue and its exports of around 1.3 to 1.65 million barrels of oil per day. It has been a country that many believed was on its way to much higher production numbers in the future. Kazakhstan, the former Russian Republic, is central Asia's largest economy and biggest oil producer. Reuter's News reported that, a wave of protests in its western oil-producing region, with at least 15 people killed in the country's deadliest riots in decades. Oil unions have threatened strikes after police shot into a group of protestors and that fear helped drive risk aversion in oil and gas. Kazakhstan was a supplier to Europe and according to Reuters and the IEA slightly over 600,000 bpd of Kazakh crude oil went to OECD countries in Europe, including Germany, which has taken around 165,000 bpd, France (154,000bpd), Italy (71,000 bpd) and Austria (51,000 bpd). Much of Kazakhstan's crude is exported via the 1,580 km (990 mile) Caspian Pipeline Consortium (CPC) pipeline, which links major oilfields in western Kazakhstan to a Black Seaexport terminal at Yuzhnaya Ozereevka, 40 km (25 miles) northwest of Novorossiisk in Russia. Of course the worries over Iran continue as their quest for a nuclear weapon more than likely will lead to conflict in the New Year. In Rome European leaders met as they prepared a plan to impose sanctions on Iran. It is increasingly likely that Iran will see a European embargo on their oil in the next few months.

The bottom line is that there are more risks to the upside than to the downside especially as we head into the hearts of the holiday markets.

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