Markets were closed late last night in preparation for hurricane Sandy, as the storm has its sights set on the east coast. With approximately 50 million people in its projected path, Sandy is predicted to dump unprecedented amounts of rain that could cause an 11 foot rise in some areas of the coast line. “From North Carolina to Maine, forecasters warned that Sandy was likely to collide with a cold front and spawn a “superstorm” that could generate flash floods, snowstorms and massive power outages” write Chelsea J. Carter and Josh Levs.
Aside from the impact on the surrounding community, the storm will also have a large sway in the commodity world, as a generous portion of our population will be impacted by Sandy. Commodity and FX markets are keeping normal trading hours for the time being, but commodity-related securities will likely see a fair amount of activity when markets finally re-open. Below we outline commodities to keep a close eye on in the coming days [for more commodity news and analysis subscribe to our free newsletter].
- Natural Gas: NG is volatile enough as it is, but throw in the fact that consumption is going to be far below normal this week, and you may just see big swings for the commodity. Assuming Thursday’s EIA natural gas report goes off without a hitch, the consumption of the fossil fuel (or lack thereof) could force large movements in prices.
- Gasoline: RBOB futures soared 2.5% in early trading today, as speculators are worried about the potential impact of the storm. Flooding and outages will surely tamper with the normal habits of gasoline use, especially considering that some of the nation’s most populous areas will be hit [see also Ultimate Guide To RBOB Gasoline Investing].
- Commodity Securities: Any and all securities that track commodities will be important to keep an eye on this week. Because commodity markets are still trading, but equities are closed, there could be significant gaps when U.S. exchanges finally resume. This could create buying/selling opportunities, but it will mostly be something that investors will want to be wary of.
Disclosure: No positions at time of writing.