China Demand Slows
Today the crude oil market is likely to temporarily shift its focus to outside market fundamentals associated with the pace of the US economy last month. However, there is an emerging bearish storyline this week that Chinese energy demand is slowing and that is given significant credence by the fact that Chinese August waterborne oil imports declined by 5.4%. Another negative force for crude oil prices is seen from news that diesel/jet fuel supplies are so overwhelming in many areas that refinery activity is likely to remain very low which in turn reduces the consumption of crude oil.
On one hand, the natural gas market continues to hold up above $2.40 as if that is credible support, but we think the market lacks fundamental justification to continue to hold a large portion of the last 2 months rally. In fact, US temperature forecast have turned more bearish in our view with much above normal temperature areas reduced to a very small sector of the country and no visible tropical storm threat on the horizon.
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.