Written Commentary
CRUDE OIL
November Crude Oil reversed higher overnight but remains inside a six week range. A drone attack on Russia’s northwestern port of Primorsk, one of the country’s largest oil and fuel export terminals, set fire to a vessel and a pumping station on Friday and may be behind the support this morning. Also, a Reuters report quoting three sources said India’s largest private port operator has banned tankers sanctioned by Western countries from entering all of its ports, which could be supportive if it means India is suspending Russian oil purchase in favor of Mideast oil. Yesterday, OPEC left its oil demand forecasts unchanged from its previous forecasts, with global oil demand expected to increase by 1.29 million barrels a day in 2025 and 1.38 million in 2026. Earlier this week IEA raised its 2025 demand growth estimate to +740,000 bpd from +680,000 in their previous forecast. IEA’s demand forecasts are at the lower end of the industry range. IEA also raised its production forecasts more than demand, increasing their global surpluses estimates for 2025 and 2026. Neither group strayed too far from expectations, and in the meantime OPEC is expanding production.
NATURAL GAS
November Natural Gas was lower overnight on follow through selling from yesterday but has moved back into yesterday’s range this morning. Yesterday’s EIA report came in at expectations, but it continued to show US storage increasing at a faster than normal rate. The report showed US gas storage for the week ending September 5 at 3,343 bcf, +71 bcf from the previous week. This was just above the average trade expectation of +70 and right at the median of the range of expectations from +62 to +80. The five-year average change for this week is +59. Storage was -1.3% from a year ago and +5.7% from the five-year average versus -2.2% and +5.4% the previous week. Storage has been increasing at a faster rate than average and faster than year ago levels in recent weeks. The surplus to the average has been widening, and the deficit to a year ago has narrowed substantially. The 6-10 and 8-14 forecasts show above temperature across almost the entire lower 48 states which should limit heating demand. It may bring some late season cooling, but that would likely be less of a drain on US supply.
Interested in more futures markets? Explore our Market Dashboards here.
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.
