Written Commentary
CRUDE OIL
Clearly, crude oil prices are vulnerable to technical and fundamental corrective action today. In addition to a slight hawkish shift in the markets view toward Fed policy, the crude oil market is also under pressure as-a-result of a significant ongoing rally in the US dollar. Furthermore, the resolve of the bull camp is likely to be tested by the shift toward deflationary commodity price action brought on by Chinese selling threats and because of the overbought technical condition into yesterday’s high.
Despite-the-fact that product prices were already in-the-midst of a 6-day slide, they have continued to fall this morning. The decline this morning is justified by in the face of a risk off environment, a sharply higher dollar, economic concern off the prospect of rising US rates, and from reports of higher Singapore weekly fuel stockpiles.
NATURAL GAS
Fortunately for the bull camp, the July natural gas contract managed to reject a trade yesterday below psychologically important $3.20 pricing and that should dent the confidence of the bear camp. However, the US temperature forecast partially favors the bear camp, but is offset by higher-than-expected temperatures throughout Europe and because of a slight expansion of the above average temperature zone in the US Northwest.
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.
