Seeking shelter from the storm
Energy Report
by Phil Flynn
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2008-08-22
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Commodities surged yesterday as it seems that in uncertain world commodities are the safe haven once again. Do you want to feel safe against the risks of a falling dollar, a failing Fannie and Freddie or safe from the ramifications of a war in Georgia, just buy a commodity and you will feel safe and warm.
Commodities are back in after being so out last week and have had the biggest comeback since Lazarus. In fact this come back is so big that according to Bloomberg News commodities headed for their biggest weekly gain in 33 years. How do they figure that? Well, they base that off of the Reuters/Jefferies CRB index of 19 commodities which soared 3.7 percent to 405.92 in New York yesterday. That marks a 6.2 percent gain for the week, the most since July 1975. Oh sure you can talk about supply and demand and talk about China getting ready to ramp up production at their factories but this was all about finding a safe place to park some funds.
Weather is also a key player. Dave Tolleris at Weather Risk says that with Fay we still have things to fear. Fay may not go away and has a chance to end up in the Gulf. That would not be good as there are other storm possibilities behind her.
Yet at the end of the day it is all about oil perceived value against a backdrop of uncertainty and a world and economic system gone wild. Is this the 1930's or 40's all over again? The best way to judge in terms of commodities is to watch the dollar. That is the gage that will drive them all.
See me today on the Fox Business Network! Also sign up for your free trial of Alaronenergies! Also get blasted with the Phil Flynn Energy Blast! Just call me at 800-935-6487 or email me at pflynn@alaron.com to open your account! Have a great day and weekend!
Buy October crude at 11740 - stop 11180.
We're short October heating oil from apprx 33500 - lower stop to 33500.
Sell October RBOB at 30800 - stop 31000.
Buy October natural gas at 800 - stop 730.
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| Meet the Author |
Phil Flynn
Phil is one of the world’s leading energy market analysts, providing individual investors, professional traders and institutions with up-to-the-minute investment and risk management insight into global petroleum, gasoline and energy markets.
Energy Report has contributed 212 issues.Our users give the newsletter an average rank of 8.4/10 (24 votes)
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