Written Commentary
CRUDE OIL
October Crude Oil is slightly higher this morning but inside yesterday’s range. This is after the sharp decline of the past seven days. A Reuters report said API crude stocks were up 347,000 barrels last week versus expectations for a decline of 2.9 million barrels for this morning’s weekly EIA report. Apparently, API gasoline stocks were down 1.043 million versus +400,000 expected (for EIA), and API distillates were down 2.247 million versus +200,000 expected. The trade is also looking for refinery operations to be up 0.2% to 91.7% in this morning’s report. Lowered expectations for Chinese demand have pressured the market recently, but that news has been in the market for the past couple of weeks. Both OPEC and IEA have lowered their forecasts for global consumption based on revisions lower for China. Expectations for a cease fire between Israel and Hamas received a slight bump this week base on hopes for “bridging proposal” between the two sides.
PRODUCT MARKETS
ULSD responded positively overnight to the unexpected decline in API distillate stocks, but RBOB’s response was mediocre. The trade may look to this morning’s EIA report for direction.
NATURAL GAS
October Natural Gas has been in a consolidation range for the past two weeks, as the chance of a late summer heat wave seems to have only a limited ability to significantly draw down supply. For the EIA storage report this week, traders are looking for a net injection of 33 bcf after an unusual, counter seasonal decline of 6 bcf last week. US supply is less burdensome than it was several weeks ago, as injections have been running at below normal levels in recent weeks. This is due to producers lowering output after prices approached 20-year lows earlier this year and could help improve the supply/demand balance. World Weather Service says the US will see warmer than normal temperatures and higher than usual cooling fuel demand overall through the next two weeks, with pockets of colder than normal temperatures.
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.
