Daily Futures Commentary COMMODITIES 021109

Wednesday, February 11, 2009

ENERGIES

The lack of confidence in the Obama administration’s financial stimulus and banking rescue plans is leading to speculation the global recession is getting deeper. This is triggering a negative response by oil traders who feel the recession will lead to less demand for crude oil. With prices plunging below the two most recent bottoms in the 39.00 to 38.00 price zone, the only hope for a new bottom at this time will be triggered by new production cuts by OPEC.

METALS

The lack of confidence in the newly proposed U.S. banking rescue plan is leading to speculation the problems with the U.S. banking system will return. The inability to clear toxic assets off the books for U.S. financial institutions increases the possibility of a major crisis in the U.S. financial system. This news is triggering renewed speculative buying in April Gold and March Silver as investors buy these hard assets for safety and a hedge against a financial system disaster. There may be a sell-off in these markets if Treasury Secretary Geithner comes back to Congress …
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