Written Commentary
CRUDE OIL
Despite several supportive developments overnight the crude oil market has started out under significant pressure today. The discounted bullish developments are reports that 80% of oil output from the Gulf of Mexico remains off-line, the potential development of a western Gulf hurricane, projections that Nigeria’s Delta area oil output may be forced into a lock down by infections and news that Chinese oil imports in August increased.
The gasoline market is also trading lower today but is not showing the type of aggressive selling seen in crude oil. Obviously, the passing of the last major 3-day US summer driving holiday signals softer demand ahead as does the ongoing troublesome US daily infection count.
NATURAL GAS
With the natural gas market massively oversold from the recent low to high rally of $0.56, it is not surprising to see a 3-day low in the early going today. However, technical traders suggest a new contract high, massive range and lower action thus far today is indicative of a “classic reversal” top on the charts. Even more discouraging to the bull camp is the fact that as of yesterday 81% of Gulf of Mexico natural gas production remained off-line (1.8 BCF) and yet prices are lower.
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2021 ADM Investor Services International Limited.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.
