Written Commentary
CRUDE OIL
November Crude Oil was slightly lower early Monday but inside Friday’s range. According to Reuters, shipping data from Kpler and Vortexa indicated that Middle East oil exports exceeded pre-war levels in September. The seven-day moving average was 18.3 million bpd on September 30 versus 18 million bpd average in the 12 months leading up to the war, with Saudi loadings leading the way. In addition, Saudi Arabia cut its oil prices for sale to Asia for November to $5 a barrel below the average of Oman and Dubai prices, down $3 from October and the widest discount since June 2020. The G-7 countries agreed on Friday to release 100 million barrels of diesel and crude oil from emergency reserves and pledged to refrain from energy export restrictions. In return President Trump said that the US would not impose a diesel export ban.
PRODUCTS
Product prices were mixed early Monday, with RBOB a little lower and ULSD higher, but neither market had moved out of Friday’s range. The agreement by the G-7 countries to release 100 million barrels of diesel and crude oil from emergency reserves and their pledge to refrain from energy export restrictions as well as US not banning diesel exports add a level of calm. At least US gasoline production will not get tied up in a lack of storage. The jump in Mideast crude exports and lower offered prices to Asia will help loosen up product supplies down the road.
NATURAL GAS
November Natural Gas bounced higher on Friday after testing contract lows and was hovering around the upper end of Friday’s range early Monday. US production appears to be starting out October at a lower rate, with LSEG putting average output in the lower 48 states 112.2 billion cubic feet per day (bcfd) as of October 3, down from the record 113.3 both August and September. The 6-10 and 8-14 day forecasts show above normal temperatures over most of the US lower 48 states except for some near normal in the PNW in the 6-10 day and the northern Plains/northern Midwest in the 8-14. This will keep heating demand low.
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.
