Superstorm Sandy, which is lashing the United States'
east coast, has left gold and oil prices in limbo and global
markets factoring in the effects of insurance claims, refinery
interruptions and the cost of home heating oil and petrol.
The superstorm initially overshadowed investor risk appetite
for higher yielding currencies and the New Zealand dollar
traded down again, falling by more than US1c on Monday, but
yesterday both the kiwi and Australian dollars made slight
gains, underpinned by some buoyancy in Asian markets.
While the New York Stock Exchange is expected to be closed
for at least two days, global trading in oil and gold
continued, with gold up barely 0.1% at $US1710 ($NZ2082).
Craigs Investment Partners broker Peter McIntyre said the New
Zealand and Australian dollars were continuing to trade in a
narrow but volatile range.
North Sea Brent crude oil was trading down 1.9% at $US107.53
per barrel, while West Texas intermediate was down US74c at
Mr McIntyre said there had been margin weakness in oil
recently and highlighted it was the maintenance season for
refineries at present, and he expected a recovery in the near
Many storm-threatened refineries in the US had cut capacity
or shut down while pipeline operators were also bracing for
the storm and shipping was expected to be disrupted.
US petrol and heating oil futures gained while US Treasuries
also rose on Monday, as economic worries over Sandy fuelled
safe-haven buying in thin trading as the storm began
battering the coast, Reuters reported.
US heating oil futures gained, touching the highest level
relative to US crude oil on record, as dealers hedged against
the risk of power outages and flooding from Sandy which could
damage refineries and shut down production for weeks.
"Markets will be watching for reports of damage to energy
infrastructure, notably refineries, post-Sandy, given the
state of extremely low gas and oil inventories as we move
into winter season," Deutsche Bank analysts said.
In Europe, stocks, led by insurers, fell on expectations
Sandy-related damage will boost claims, while political
jitters in debt-laden Italy cast shadows on the euro zone,
Reinsurers Swiss Re and Hannover Re led a weaker European
insurance sector index as the market tried to estimate the
clean-up costs of Sandy.