Week Price Changes
Heating Oil: $-.0318
RBOB Gasoline: -$.0172
US Debt Ceiling Debate Sells off Equity Prices and Raises Demand Fear Concerns
Crude oil Prices had their first weekly drop since June. Risk Markets were negative all week as Traders continued to watch the stalled U.S. Debt Ceiling Stalemate. Senate Majority Leader Harry Reid was working with other Democrats to break the impasse by amending his Bill to include a strict enforcement mechanism to guarantee future deficit savings. Republican House Speaker John Boehner’s Bill was delayed Thursday evening after his plan failed to gain enough backing from his own party members. Speaker Boehner now plans to have a Bill to raise the debt cap and cut spending which will be voted on Friday evening. The Treasury has set a deadline of August 2nd for increasing the debt ceiling to avert a default. The markets will also need to deal with the ramifications of a downgrade to US Treasuries if a deficit plan is passed but falls short of rating agencies criteria for a creditable solution to the rising U.S. debt burden. Standard & Poor’s placed the U.S. AAA rating on “Credit Watch” July 14th, saying there’s a 50 percent chance it would be cut in the next 90 days even if an agreement is reached by the deadline. Rates for borrowing and lending securities in the repo market increased to the highest level in five months.
The U.S. Commerce Department reported on Friday U.S. GDP grew a 1.3% in the second quarter following a revised .4% gain in the first quarter. First Quarter GDP was initially reported at 1.9% by the U.S. Commerce Department.
Tropical Storm Don headed for the Texas Coastline and caused the shut-in of 6.8% of oil and 2.8% of gas production from the gulf according to the Bureau of Ocean Energy Management, Regulation and Enforcement. The storm is expected to make landfall late today or early tomorrow 150 miles South of Corpus Christi with maximum wind of 50 miles per hour.