Iran launches missiles, Israel to retaliate
Tuesday’s massive ballistic attack launched crude oil prices as well. Traders’ main concern is that Israel’s response will target Iranian oil infrastructures. The price explosion, however, has been mitigated by reports that OPEC nations’ spare capacity might make up for the potential Iranian output decline.
While Iran can export 1.7 million barrels, Saudi Arabia, alone, has been able to increase production by 3 million barrels per day.
President Biden stated he was opposed to strikes on Tehran’s nuclear facilities, but the uncertainties of Israel’s next move have created huge suspense throughout our economy. Energy prices impact virtually every aspect of our standard of living — businesses, food production, shelter, safety and transportation.
Threatened port strike delayed
The U.S. East Coast and Gulf Coast dockworkers strike at cargo ports has been averted as the union representing the workers agreed to suspend the strike when their employers agreed to increase worker wages.
A disastrous effect on the supply chain of both raw materials and finished products could move through our economy, increasing the threat of rising inflation, if the strike is not completely resolved. Imported perishable fruit and frozen foods will be threatened immediately, whereas more storable coffee and cocoa could face later impact. Farmers exporting poultry or soybean cargoes could experience problems marketing their exports.
Helene to cost $35 billion?
Several insurance industry damage estimates have exceeded $35 billion for wind damage. Flooding, business interruption losses, health care cost and myriad other long-term economic losses are yet to be assessed. Though the devastating loss of lives and homes is beyond comprehension, financial loss estimates are below those of hurricanes in 2018.
Long term, the consequences of super-charged global warming on our economy from the effects of “natural” disasters could dwarf even geopolitical threats such as the missile attacks and labor strikes of this week.
Friday’s prices
As of midday, gold for December delivery was trading at $2,675 per troy ounce, silver at $32.58 per ounce and November crude oil at $74.60 per barrel. November soybeans were at $10.38 per bushel, December corn at $4.24 and December wheat at $5.88.
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.
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