Written Commentary
CRUDE OIL
The overbought status of crude oil, combined with widespread market fears of sharp increases in interest rates has fundamental and technical forces favoring the downside today. While global floating storage of crude oil (as measured by the ARA) fell by 5.8% on a weekly basis, this week’s API report posted a gain in crude stocks of 4.1 million barrels and that breaks a pattern of weekly declines and is a large enough inflow to get the attention of the market.
With a lower close yesterday and a follow-through downside action early this morning, the bull camp should enter the session today concerned. Furthermore, there are reports that significant amounts of Asian oil products are headed to Europe and API gasoline stocks yesterday afternoon jumped by a much larger than expected 3.5 million barrels.
NATURAL GAS
In addition to a significant overbought short-term technical condition, the natural gas market saw profit-taking following headlines suggesting some power generators were looking to secure cheaper alternatives to surging LNG prices.
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.
