Tropical Storm season generally makes a splash on the commodities scene sending the future prices way up. This is most recognizable in the Oil Markets. With Tropical Storm Fay making its way towards the southern tip of Florida, we’re going to start with the energy markets this week, since a big chunk of oil and natural gas supplies are located near this area in the Gulf of Mexico.
Last we checked, the crude oil September futures contract topped out at $147.90/barrel on July 11. But as you probably know, it’s dropped like a rock, down to its current level around $114 a barrel – $34/barrel from its high.
That equates to a $34,000 move on one futures contract alone. There’s a possibility it could fall further, but not surprisingly, we’ve seen some volatile action today, as Fay swirls towards south Florida.
However, current projections have the storm steering clear of the major oil platforms in the Gulf of Mexico. And when the short-term dust settles, the downward move could end with oil landing at the $108 area. That would put it right at the 200-day moving average line, which would be its last hope for a bounce.
