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Saturday, September 6, 2008

Hog Comments - 09-06-08 - Hurricane Ike on path to the Gulf of Mexico?

Hurricane Ike Storm Track as of the morning of 09-06-08 
http://media.myfoxtampabay.com/myfoxhurricane/ 
The graphic to the left is a current track of Hurricane Ike.  It looks as if we could have another storm in the Gulf of Mexico which could have an effect on the price of Crude Oil next week.  The crude oil market didn't seem too worried about Ike last week due to the major sell off we had after Gustov provided minor damages to oil rigs.

Ike is projected to be in the Gulf by late Wednesday/early Thursday of next week.  I would expect to see the Crude market to firm beginning on Sunday night assuming there are no major changes to the storm track of Ike.  If the Crude Oil market moves higher it will be hard for grains to continue the decline they have been on.  I am not changing my comments from yesterday, I am just pointing out the possibility of volatile markets next week due to the Hurricane effecting the Oil market.  The market may be waiting for further confirmation of Ike's path after being "faked out" by Gustov.  


Gulf of Mexico Oil Rig locations - Katrina and Rita storm paths.
 
The graphic to the left is were most of the oil platforms are located in the Gulf of Mexico.  Most of these platforms are off the coast of Louisiana.  The graphic shows the storm path of Hurricane Katrina and Rita from a few years ago.  I would imagine the number of platforms has changed to some degree over the last couple years but I doubt it is by much.  I found this graphic on the website http://danswenson.com/paper/katrina.html.  The current track of Ike is moving just to east of the oil platforms surrounding Louisiana but it is still very early in predicting with any great accuracy the path of this storm.  You will notice the yellow portion of the track (in the graphic above) or the probability section, Ike could very well be heading straight for this area.  It is still very premature to make this assumption and by no means am I a meteorologist.  These are my observations as a trader and what my perception of damage Ike could bring to the Gulf and in the end it is trader perception that moves the markets.  I am just pointing out information, you decide what you think.  If Ike continues to track toward the Gulf we could see better energy markets next week which could stabilize the grain markets.  Just food for thought. 

 
If you would like to view more information on Ike you can visit the NWS hurricane center by using this link.  Hurrican Ike - National Weather Service

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