It's Deja Vu All Over Again - Commodities React to Downgrade

Posted by Mark Pszeniczny on Aug 8, 2011 5:23:00 PM

The levee broke once again as world markets reacted to S&P's decision to downgrade the US credit rating.  Commodities opened down over 7 cents on Sunday night and didn't look back.  Trading in negative territory all day and then banging the close with about 20 minutes left in the session.  HEAT fell as much as .1530 before clawing its way back to finish down .14 to 2.8017.  RBOB  coincidentally, was holding up for much of the day as it languished down around 4 cents before falling .1136 to $2.6916.   WTI  fell  a staggering $5.57 to $81.31.  The devil is in the details though, the 2.80 level on HEAT, while breached, held for the close, same can be said for the $80 mark on WTI.  Look for a buy back on Tuesday with further downside to come the remainder of the week as money continues to get pulled out of commodities.

heat chart

RBOB CLOSE
                 CLOSE       CHANGE 
  
SEP    26916       -.1136
OCT    25515      -.1353
NOV    25265      -.1399
DEC   25154       -.1413
JAN    25195       -.1422
FEB    25330      -.1425
HEAT CLOSE
          CLOSE    CHANGE
SEP    28017     -.1400
OCT   28114      -.1399
NOV    28241      -.1390
DEC   28365     -.1384
JAN   28498       -.1374
FEB   28509       -.1366
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Topics: Commodities, US Credit Rating, S&P Downgrade

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