Crude oil prices declined to a six-year low, approaching $40 per barrel as US and international producers continue pumping petroleum despite an overwhelming global glut of fuel.
Many US shale producers have invested massive sums in current projects, forcing them to continue producing at low prices, as a small loss is preferable to a total loss. In other cases, projects are still profitable at oil prices into the mid $30s, encouraging some to expand.
Similarly, OPEC nations & Russia are hurting from the low prices but have kept high levels of production to boost their falling revenues. As a result, production globally continues to outpace demand by over a million barrels a day, which could push prices lower yet.
This week's drop in crude oil prices was the eight straight decline, making this the longest weekly losing streak in crude oil since 1986, when prices fell from over $30 to under $10 per barrel.
Gold Vaults Higher
Gold prices exploded to a one-month high after bargain hunters swooped into the metals markets.
Prices had been languishing at a five-year low near $1080 per ounce just a few weeks ago, but recent developments caused the market to explode to near $1170 by Friday.
On Wednesday, the Federal Reserve released the minutes from its meeting, which indicated lower odds of an interest rate hike. Continued low interest rates should stoke inflation and depress the value of the US dollar, which boosts demand for gold.
Meanwhile, US stock markets suffered a steep selloff this week, which inspired traders to dump stocks and buy gold.
As gold rose, so too did silver and platinum, which traded Friday for $15.30 and $1028 per ounce, respectively.
Kansas City in a Slump
Wheat traders have been shocked by the huge decline in Kansas City wheat, which fell to a five-year low this week. On Friday, it traded for a mere $4.70 per bushel, sharply below its sister contract, traded in Chicago, which is worth $5.00 per bushel.
For wheat traders, KC wheat's 30-cent discount is especially jarring, as KC is typically valued at 35 cents more than Chicago due to its higher protein content.
This disparity is largely due to weather; hard red winter wheat (KC) is primarily grown west of the Mississippi, where weather has been fine, but soft red winter wheat (Chicago) is grown more frequently east of the Mississippi, where heavy rains have caused diseases and delayed harvests, reducing supply.