Monday, September 1, 2008

By Aaron Smith, CNNMoney.com staff writer

Last Updated: August 30, 2008: 5:02 PM EDT

NEW YORK (CNNMoney.com) -- Gas prices zoomed higher in states along the Gulf of Mexico as workers on offshore oil rigs abandon ship ahead of Hurricane Gustav which became a category 4 storm on Saturday.

Meanwhile, the national average price of gasoline crawled up for a second day in a row. A gallon of regular unleaded gas rose by about a penny to $3.682 a gallon overnight, according to the motorist group AAA.

The price increase was most dramatic in Mississippi, where the statewide average for unleaded gasoline rose about 4 cents a gallon on Saturday. Gas rose by about 5 cents a gallon in the coastal cities of Biloxi, Gulfport and Pascagoula, said AAA.

Gas also rose by about 4 cents a gallon in Louisiana. Alabama saw a daily increase of about 3 cents. In Texas prices rose more than 2 cents, and in Florida prices rose by more than a penny, according to AAA. In New Orleans, gas prices rose by just over 4 cents a gallon. All of these areas are dependent upon oil rigs in the Gulf of Mexico as a major part of their oil supply.

In comparison, gas prices declined overnight in New York, New Jersey, California, states that are not directly dependent on the Gulf.

"Prices are more affected down South, while New York is supplied through [New York] Harbor," said Fred Rozell, oil analyst with the Oil Price Information Service.

Rozell said these increases are particularly painful to Mississippi, not just because the price increases are the most dramatic there, but because it's a state where people tend to have less discretionary income.

"I think some of those areas are going to get hit hard again and it's really going to squeeze people," said Rozell.

Get ready for high gas prices: The price increases are likely to continue, said Rozell, partly because of the storm, and partly because of recent increases in wholesale gasoline prices, which tend to lead retail prices. Rozell expects prices nationwide to increase by 10 cents a gallon over the next five to seven days, or by 15 to 25 cents in the Gulf Coast states.

Hurricane Gustav smashed into the Dominican Republic and Haiti on Thursday, killing more than 50 people and causing extensive flooding. The storm headed west and whipped into Jamaica at midday on Friday. The storm crashed through the Caymans and Cuba as it headed for the Gulf of Mexico. It built into a category 3 hurricane and now threatens to smash into New Orleans and the surrounding region early next week.

If the storm continues along its projected course, it could threaten the 4,000 drilling platforms and 33,000 miles of pipeline in the Gulf Coast, which sends 1.3 million barrels a day to the Gulf Coast's 56 refineries.

"We are seeing [gas price] increases here that are based on the possibility that there may be some supply dislocation," said Peter Beutel, oil analyst with the firm Cameron Hanover. "That would affect supply close to the affected area, as opposed to anywhere else." 

2) Commentary by David Zwebner, CEO of CommStock Trading 

U.S. Economy
The U.S. Commerce Department said that personal incomes were down .7% in July, weaker than expected and the biggest drop in three years. Consumer spending was up .2% on the month. The core rate of personal consumption expenditures was up 2.4% in July from a year ago, the biggest increase in over a year.

The University of Michigan's index of consumer sentiment increased from 61.2 to 63.0 in August, also stronger than expected. The June eurodollars ended down .015 at 96.915.

The Chicago Purchasing Managers' index increased from 50.8 to 57.9 in August, much stronger than expected.

Energies
October crude oil traded higher for most of the day, but finished down .13 at $115.46 as Tropical Storm Gustav remains on track for oil and gas rigs in the Gulf of Mexico. Gustav is expected to become a category two or three hurricane when it hits either Texas or Louisiana on Monday or Tuesday.

Grains and Cotton
December cotton closed up .42 at 69.78 as the U.S. cotton crop remains vulnerable to heavy rains from Gustav.

Orange juice
November orange juice was up .0075 at $1.1215 while Tropical Storm Hanna makes its way toward Florida.

Sugar
October sugar fell .47 to 12.76 even though the sugarcane fields in Louisiana, Cuba, and Jamaica are all in the path of Gustav.

Coffee
December coffee closed down 2.05 cents at $1.4575 while traders watch to see if coffee warehouses in New Orleans survive the coming storm.

Currencies
Statistics Canada said that real GDP was up .1% in June and up .7% from a year ago, weaker than expected. The September Canadian dollar dropped 1.09 cents to 93.97.

Eurostat reported that the unemployment rate for the Euro area 15 was unchanged at 7.3% in July. Consumer prices were estimated to have risen 3.8% in August from a year ago, down from a 4.0% gain in July. The September euro fell .0058 to $1.4631.

Japan's Statistics Bureau said that consumer prices were up 2.3% in July from a year ago, up from a 2.0% gain in June. Also, industrial production was up .9% in July, stronger than expected. The September yen closed up .0068 at .9202.

The Japanese government said that they will spend 11.7 trillion yen in an effort to stimulate the economy. 9 trillion yen will be spent as aid to small businesses.

Australia's Housing Industry Association said that new home sales were down 7.2% in July to the lowest level in two years.

Some markets closed early today ahead of the Labor Day weekend.

David Zwebner, CEO
CommStock Trading Ltd.
Tel: +972-(0)2 624-4963
Fax: +972-(0)2 624-4876
www.ecommstock.com

Interested in reading perspectives and analyses on the Forex market?  In learning what factors affect the Forex market every week and what to be on the lookout for?  In getting trade recommendations?   Email mona@ecommstock.com  to get your copy of a weekly Forex report.

Amidex: Amidex35 (Class No Load Shares), $14.65; Index, 2102.99, Daily Change,-.35%; “A” Shares NAV, $11.30.

Global Asset Management: Capital Appreciation, $269.36; Composite Absolute Return, $896.68; Diversity, $723.10; GAMCO, $910.95; Interest Trend, $251.78; Trading IV-US$ Class, $145.14; US$ Special Bond Fund, $440.62.

Invesco: Asian Equity Core, $4.49; Bond, $25.29; Emerging Markets Bond, $19.95; European Bond, EUR 4.3371;

Gilt, GBP 12.27; Global High Income, $11.68; Japanese Equity Core, $1.420; UK Equity, GBP 5.14. 

JPMorgan Fleming: JF Eastern Smaller Co., $93.38; JF Japan, JPY 15,750; JF Japan Equity, $11.72;

JF Japan OTC, JPY 972; JF Japan Smaller Companies, JPY 35,243; JF Japan Technology, JPY 46,958; JF Korea, $35.41;

Pacific Securities, $178.78; Pacific Smaller Companies $21.19; Global Bond & Currency, $21.54;

JF America, $44.17; JF Europe, $43.98; JF Germany, EUR 20.54; JF Global Equity, $39.45.

PCP: North America, $11.93; Europe, $18.25; Emerging Markets, $16.70; Balanced, $8.25; Aggressive, $6.85.                                                                                           

Platinum (updated once a month – July 2008 Prices): All Weather, $128.75; Equity Plus, $91.67; Prot. Equity Plus, $84.34; Prot. Income Plus, $86.05; Cap. Prot. Income Plus A, $89.37.

Scottish Provident: Adventurous 1, GBP 2.840; Balanced 1, GBP 2.318; USD Adventurous 1, $2.213;

USD Balanced 1, $2.150; USD Cautious 1, $2.042; For Preference: Baring GUF Eastern Europe, $126.45; Fidelity Funds International, $33.61; Invesco Asian Equity Core, $4.460.

Mona Liss
CommStock Trading Ltd
PO Box 7777
Jerusalem 91077
Tel: +972-2-6244963
Fax: +972-2-625 9515