Har­vey’s havoc

The Oklahoman (Sunday) - - BUSINESS -

The price of un­leaded gaso­line blasted up­ward by more than 15 cents per gal­lon on fears of supply dis­rup­tion caused by Hur­ri­cane Har­vey.

A storm so big it af­fected mar­kets leads this week’s edition of Fu­tures File, our weekly com­modi­ties wrap-up.

Hur­ri­cane Har­vey ham­mers Texas

On Thurs­day, the Na­tional Weather

Ser­vice re­ported Trop­i­cal Storm Har­vey had quickly de­vel­oped into a ma­jor hur­ri­cane and was aim­ing for Texas.

Ex­pected to reach Cat­e­gory 3, Har­vey could be the worst storm to threaten Texas in decades, pos­ing a grave risk to mil­lions of peo­ple and homes. The storm could also dam­age or shut down oil rigs and re­finer­ies on the Gulf Coast and in­land where the storm was pro­jected to hit land.

As traders watched pro­jec­tions pre­dict­ing winds ex­ceed­ing 125 miles per hour and flood­ing caused by up to three feet of rain, the price of un­leaded gaso­line blasted up­ward by more than 15 cents per gal­lon on fears of supply dis­rup­tion. Texas has more oil re­finer­ies than any other state, mak­ing up about a third of to­tal U.S. re­fin­ing ca­pac­ity.

Even though the U.S. De­part­ment of Agri­cul­ture re­cently pro­jected a 49.4 bushel per acre na­tional av­er­age soy­bean yield and record size bean crop, large ex­ports to China and else­where helped prop up prices early in the week.

Though some deals were can­celed, thoughts that China could in­crease U.S. bean im­ports for live­stock feed helped fuel a rally in Amer­ica’s high­pro­tein crop, help­ing Novem­ber soy­bean prices re­cover to a two-week high near $9.47 on Fri­day.

Gold could eclipse $1,300 per ounce

Amid in­ter­na­tional saber rat­tling, po­lit­i­cal dis­cord, and a weak U.S. dol­lar, gold prices have in­creased 12 per­cent since the be­gin­ning of 2017, out­pac­ing Trea­sury bonds and the stock mar­ket.

De­bate over the fed­eral debt ceil­ing could in­crease fi­nan­cial fears and threaten the value of pa­per as­sets, boost­ing gold. Met­als are also gain­ing ground as a hedge against trou­ble on ongoing fears of the es­ca­la­tion of mil­i­tary threats with North Korea and other global hot spots.

On Fri­day morn­ing gold prices had wild swings up and down as re­ports emerged from the eco­nomic con­fer­ence in Jack­son Hole, Wy­oming, re­gard­ing the Fed­eral Re­serve’s pol­icy on in­ter­est rates. Lower in­ter­est rates typ­i­cally stoke in­fla­tion and boost gold prices.

As of mid­day Fri­day, gold con­tin­ued to flirt with the $1,300 per ounce bar­rier which, if bro­ken, could send gold much higher as buy­ers add to win­ning bets.

Opin­ions are solely the writ­ers’. Walt and Alex Bre­itinger are com­mod­ity fu­tures bro­kers with Paragon In­vest­ments in Sil­ver Lake, Kansas. They can be reached at (800) 411-3888 or www. parag­o­nin­vest­ments.com. This is not a so­lic­i­ta­tion of any or­der to buy or sell any mar­ket.

[AP PHO­TOS]

Ra­mon Lopez boards up win­dows of a busi­ness in Galve­ston, Texas as Hur­ri­cane Har­vey in­ten­si­fies in the Gulf of Mex­ico Fri­day.

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