Commodities up on US slump

It sounds like more of the same from the past few weeks: sharemarkets rattled, financial stocks rattled and commodities on the slide: it was up till Friday when it suddenly became a very different story.

The US dollar fell as the slide in the euro came to an end; the Australian dollar bounced a couple of cents; gold, copper and several other commodities rose and Hurricane Ike was the big influence.

But the big question was whether Friday's bounce was due to Ike coming ashore and apparently not leaving too much damage to the oil and gas producing, refining and distribution facilities along the Texas coast between Houston and Galveston.

At least 13 refineries in Texas were shut for the passage of Ike.

That was 3.64 million barrels a day of refining capacity.

Gulf refineries and ports are the source of about 50% of the fuel and crude used in the eastern half of the US.

Traders say any outage in the Houston area for longer than a few days could see US petrol prices rise back to $US4 a gallon.

But as we have seen after storms in the past month, once the situation is clarified, then the prices of oil, petrol and gas will ease quite quickly.

If there's nothing serious, oil prices will likely go for another dip to well under $US100 a barrel, possibly to $US95 a barrel or even $US85, according to some chartists.

The October New York contract briefly dipped to $US99.99 on Friday, falling under the $US100 level for the first time since April 1.

But Nymex crude in New York rose 31c to close at $US101.18 a barrel.

In London, October Brent North Sea crude eased 6c to settle at $US97.58 a barrel.

Oil prices are down $US47.29 a barrel since the peak of $US147.47 on July 11.

For all the sound and fury of Ike, the real story remains the continuing dip in American consumption of oil-based energy products.

US energy consumption is down 3.8% over the past four weeks compared with the same period in 2007, while petrol consumption is down 2.1%.

http://livenews.com.au/Articles/2008/09/14/

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Commodities up on US slump