Helene sinks oil prices

Though hurricanes can interrupt oil production from the gulf of Mexico and nearby refineries, the supply threat does not always result in higher prices for the most widely traded Texas crude oil. Gasoline prices might rise as demand remains strong and supply from refineries is shut-off; but, since crude oil can’t be utilized by the refineries, a glut of crude can back-up causing oil prices to drop.

Helene, though ferocious, seems to have inflicted no lasting damage to either drilling or refining operations.

Another factor identified as causing the decline was some reporting that Moscow and Saudi Arabia will increase oil exports to meet any supply shocks due to the storm.

Gold glitters as fears dominate Wall Street

A combination of factors triggered an explosion in metals prices last week. Gold hit its highest mark in history as silver, platinum and copper surged through previous high marks.

Geopolitical tensions, especially in the Mideast, contributed to the stampede of investors who saw the metals as a safe haven store of value if other investments declined during tensions. Fears surrounding Israel’s invasion of Lebanon were identified as one key motive by gold — bugs who expect inflation fueled by more government spending should military conflicts accelerate.

Copper’s explosion, too, might have been ignited by expectations of an increase in construction demand as Helene carves a path of housing destruction through the southeast. Copper is used in both plumbing and electrical repairs and in new construction that might follow the hurricane.

Friday’s prices

As of midday, gold for December delivery was trading at $2,676 per troy ounce, silver at $ 31.90 per ounce and November crude oil at $68.15 per barrel. November Soybeans were at $10.68 per bushel, December corn at $4.19 and December Wheat at $5.82.

Opinions are solely the writer’s. Walt Breitinger is a commodity futures broker in Valparaiso, Ind. He can be reached at (800) 411-3888 or www.indianafutures.com.