West Texas oil futures sank more than $11 per barrel during the week, with April delivery crude hitting a low of $65.17 on Friday. The crash sped up midweek as Silicon Valley Bank failed, causing Wall Street and businesses on Main Street to fear recession. Although lower petroleum prices help motorists at the pump, some fear there will be fewer commuters buying gas if a recession occurs. As the banking turmoil spread, speculators dumped oil and stocks but bought gold and bonds because they are thought to be safe havens from tumbling industrial commodities. Crude oil stockpiles in the U.S. remain high, adding pressure from that side of the formula.
At the global level, other countries are also worried that rising interest rates in Europe and the U.S. will continue to hurt demand and slow economies. OPEC nations are unlikely to cut production, as they need cash and have already had to discount prices to move their product. Stories continue to circulate that more cheap Russian oil is flowing through southern pipelines toward adversaries of the West. Crude’s cousin, natural gas, also worked lower as seasonal temperatures rose and rig counts increased.
Drones Fighting for Farmers
In what some described as an act of war, an unmanned U.S. aircraft was downed this week. The implications may be big, as tensions are already high among the world’s biggest military powers. High-flying technology is helping farmers as computer-backed drones are mapping soil moisture, fertility and pests. These drones are providing farmers advantages, helping to feed the world more efficiently and economically.
Drones can be used in fields, forests and on ranches to detect and treat myriad plant diseases, even scouting insect larvae well before a human could arrive on the scene. These computers can warn producers of impending drought effects or nutrient deficiencies, which can improve yields of grains, row crops, fruits, vegetables, livestock and lumber.
Weekly Winners and Losers
The biggest gains were in the metals and stock indexes. Gold was the strongest metal gaining $120 per ounce, while copper was the weakest, losing roughly 15 cents per pound.
The NASDAQ was the strongest of the stock indexes. May corn was up 25 cents per bushel at $6.35. Wheat closed at $7.09 with beans at $14.76, both about unchanged on the week.
Hogs stumbled closing down around 10 cents per pound on the week, while crude crashed by more than $10 per barrel. As of midday Friday, May crude was trading at $66.50 per barrel. May cotton made new lows closing at .7758 per pound.