Written Commentary
CRUDE OIL
While the IMF upward revision in the outlook for China, widespread expectations of an extension of the OPEC plus production restraint agreement and the upside extension on the charts the bull camp has extended its control. However, there are several signs of improving demand following a 7% year-over-year jump in Indian April crude oil imports, higher week over week global refinery runs, last week’s strong EIA implied gasoline demand reading, and from a minimal upside breakout in last week’s EIA implied distillate demand. Crude oil is also drafting minimal support from recent weakness in the dollar, an attack on a ship in the Red Sea, and a pocket of expectations for a decline in tomorrow’s EIA crude oil inventories. Issues that provide a measure of headwinds for crude oil today are a 1.4% week over week jump in European crude storage, the upside breakout in global sovereign bond yields and the potential for reduced buying from the approach of the highest prices this month.
NATURAL GAS
While US cooling degree days have run well above normal for several weeks and Texas noted record electricity demand, natural gas prices were dramatically overbought from the low to high May rally of $0.90. This week’s Reuters poll projects natural gas in working storage to increase by 73 to 86 BCF. In a longer-term supportive development, the IEA expects Indian natural gas demand to rise by 7% this year.
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.
