There appear to be press reports of a subway blast in London. On top of that, oil and rubber futures are surging again.

Natural rubber prices in Tokyo, today are up over 3 percent, the biggest fluctuation of any commodity today, after crude oil surged to a record, increasing the cost of synthetic alternatives. Rubber futures, up 9.2 percent this week, are making for their biggest weekly gain in more than three years. They have risen 32 percent this year. Natural rubber prices will follow synthetic rubber prices higher and of course that is dependent on oil prices.

When I got up this morning and turned on my market data, I was shocked. The drop in stock futures around the world, and commodity futures rising again. In a hefty way. The tire industry is the biggest consumer of rubber. The source of natural rubber is limited to one small area in s.e. asia. Implications?

Spot prices for butadiene, the petrochemical used to make synthetic rubber, have surged 84 percent to 58 cents a pound in the past year. Butadiene is derived from processing crude oil. I see crude oil futures are nearly $62.00. Relief may come next year, but I am watching it closely.

Tire output in China rose 27 percent to 239 million last year on rising auto sales.
Thailand is the world's biggest rubber producer, and will probably produce 3 million tons, this year. Thailand is very important to the whole world, in this regard.
But, when I wake up and see S&P futures down 22, I open my eyes real fast.

Bottom line, natural vs. synthetic rubber- what if something happens to rubber trees? What about transportation? What about the quantity of natural rubber the world depends on? Fewer tires mean strategic options must be implemented. I see no reason for a rubber meltdown, or rubber terrorism, or disease, but one must say a little prayer, from time to time.


Edit
5:30 local time- It appears London FTSE is down 152, and Dax about 150. Traders are probably closing some operations for now, amidst the confusion and possible evacuation procedures. News reports say the army is out in Covent Garden, and as many as 50 persons may be dead. Subway blasts and a bus explosion are being reported. The Middle East terrorism and energy supply wars continue to have far reaching implications.

Markets are holding steady, though still down. The worst I ever saw was 9-11.
On that morning, I turned on markets as I always do, and they were down 5 times worse than today. So, I imagine security will beef up in Washington, and London will pull out the stops to treat the injured and secure everything possible. They are highly prepared, and have very efficient operations. My heart goes out for the
suffering.

That said, I do not think this will derail markets, as such attacks seek to do. Though, the insurance agencies, like Swiss Re, are very nervous about terrorism. They are the providers of last resort, when disaster strikes.

LONDON (Dow Jones)--Front-month Brent and Nymex crude futures traded in London slumped more than $4 a barrel Thursday amid widespread liquidation following a series of explosions in London.
At 1050 GMT, the front-month August Brent contract on London's International Petroleum Exchange was down $2.03 at $57.82/bbl. The contract had traded as low as $55.55/bbl earlier Thursday.
The front-month Nymex August crude contract was trading $2.13 lower at $59.19 after hitting a low of $57.20/bbl.
Oil moved sharply higher early Thursday with Nymex front month trading above $62 and Brent crude trading above $60 at the front end of the curve for the first time ever.
Subsequently, prices have fallen back sharply as news emerges of the explosions in London.
"It seems like quite a few have closed out positions amid the uncertainty," said one oil broker based in London.