Wednesday, September 07, 2005
As a nod to the current trend of talking about stuff in which you may have a professional or academic interest, some commodity news:
There were two major pressures on the world economy this month: high and rising energy prices and Hurricane Katrina. Traditionally August shows strong demand for oil, but this year, and with OPEC countries producing at near capacity, even more pressure was put on prices by a series of supply shocks. What the effects of these high prices will be is yet to be seen for sure, but consequences are feeding through. Japan is particularly vulnerable as it has no indigenous hydrocarbons – as oil prices rose the yen came under pressure. Hurricane Katrina made things yet worse, shutting down refining capacity in the Gulf of Mexico. The hurricane also had an effect several other commodity prices: 27% of the U.S. coffee inventories are in New Orleans warehouses, and fears that these might be lost led to a rise in the market; lumber appreciated in anticipation of the reconstruction effort.
EXTRA! EXTRA! Cattle markets bullish.
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There were two major pressures on the world economy this month: high and rising energy prices and Hurricane Katrina. Traditionally August shows strong demand for oil, but this year, and with OPEC countries producing at near capacity, even more pressure was put on prices by a series of supply shocks. What the effects of these high prices will be is yet to be seen for sure, but consequences are feeding through. Japan is particularly vulnerable as it has no indigenous hydrocarbons – as oil prices rose the yen came under pressure. Hurricane Katrina made things yet worse, shutting down refining capacity in the Gulf of Mexico. The hurricane also had an effect several other commodity prices: 27% of the U.S. coffee inventories are in New Orleans warehouses, and fears that these might be lost led to a rise in the market; lumber appreciated in anticipation of the reconstruction effort.
EXTRA! EXTRA! Cattle markets bullish.
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