Gasoline prices up 29% this week, here’s why
Gasoline continued to soar as further
details emerged of the devastation caused by hurricane Katrina in the Gulf of
Mexico.
In the
latest report
released by the US Minerals Management Service the number of platforms and rigs
still evacuated or shut down declined slightly from yesterday’s levels but still remained extremely high. Today’s closures account for 51.65% of 819 platforms and
47.65% of 137 rigs in the Gulf of Mexico. In terms of daily crude oil and gas
production lost, the percentages are 90.43% and 78.66% respectively.
Harbor Unleaded Gas +6.82% led the energy complex
higher, followed by Heating Oil +5.88%, Natural Gas +2.30% and
Crude Oil +0.77%. 3 out of the 4 were highlighted in the
TradingMarkets Momentum 5 list last night.
The US dollar declined after the ISM Manufacturing data was
released (Full Report).
The report showed that manufacturing grew for the 27th consecutive month and the
overall economy grew for the 46th consecutive month. Nonetheless the index came
in below analyst expectations leading to the dollar selloff.
The ISM data continued the recent trend of weaker than
expected numbers that point to a slowing economy. Combined with record high
energy prices and the aftermath of Katrina the pressure is increasing on the
Federal Reserve to cease raising interest rates. The clearest indication of
which came in the form of sharply higher US treasuries following the report,
especially in the shorter dated maturities. 10yr T-Note +0.18%, 5yr
T-Note +0.17% and 2yr T-Note +0.18.
The falling dollar boosted metals prices, with both industrial
and precious metals closing higher. The group’s largest percentage gainer was
Silver +2.67%, then Gold +1.92%, Copper +1.76%, Palladium
+1.08% and Platinum +0.99%. Copper is likely to be in demand when
rebuilding begins in New Orleans, the industrial metal’s primary use is in
construction.
All the softs closed higher today. Leading the charge was
Cocoa +5.95% as fears increased that the upcoming election in Ivory Coast
will take place peacefully, or even at all. Coffee +3.50% moved higher on
expectations of greater losses of inventories in New Orleans. Lumber
+3.50% closed limit up for the third day in four. Frozen Orange Juice
+1.36%, Cotton +0.40% and Sugar +0.30% round out the group.
The grains also closed positive, led by Corn +2.66%,
Wheat +1.57% and Soybeans 1.29%.
Economic News
Monster Employment Index:
Actual 142
Jobless Claims:
New Claims – Actual 320 K Consensus 315 K
Personal Income And Outlays:
Personal Income, M/M Change – Actual 0.3% Consensus 0.6%
Consumer Spending, M/M Change – Actual 1.0% Consensus 1.0%
Construction Spending:
M/M Change – Actual 0.05 Consensus 0.5%
ISM Manufacturing Index:
Actual 53.6 Consensus 57.0
Ashton Dorkins