Explore Special Offers & White Papers from ADMIS

Bullish Momentum Continues to Dominate

CRUDE OIL

As February crude oil nears its contract high of $82.13, the overnight energy related headlines are mostly bearish. In addition to a weekly rise in European crude oil storage of 4.5%, the crude oil market is also discounting news that US fracking activity is ramping up sharply which in turn should boost US production in the future. In yet another bearish development China has apparently implemented rules to reduce refinery activity to clear up the air head of the Olympics, which in turn should reduce the need for Chinese crude oil imports.

Like the crude oil market, the gasoline market has also discounted patently bearish fundamental news overnight and continues to rally aggressively. In fact, the API overnight pegged gasoline stocks to have increased by a whopping 10.8 million barrels and that follows a 10.1-million-barrel build in EIA gasoline stocks last week.

NATURAL GAS

While we suspect that natural gas prices are being lifted by the slipstream of the sharp rise in petroleum prices the primary lift is likely ongoing Russian restrictions on gas flows to Europe. Reports from Russia that 2021 Russian gas consumption remained well below 2020 gas consumption levels adds credence to the view that Russia is using gas as a political weapon. According to recent reports European gas storage is 51% of capacity compared to a 5-year average of 67% for this time of the year.

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.

Latest News & Market Commentary

Explore Special Offers & White Papers from ADMIS

Get Started