Written Commentary
CRUDE OIL
A recovery bounce in the precious metals today has lent support to the commodity sector, and crude oil has benefited. US and Iranian officials have confirmed that the two sides plan to resume their nuclear talks in Turkey on Friday. Trump warned that with big U.S. warships heading to Iran, bad things could happen if a deal was not reached. News that the US and India he had agreed on a trade deal that slashes US tariffs on Indian goods to 18% from 50% in exchange for India lowering trade barriers, stopping its purchases of Russian oil and buying oil instead from the US and potentially Venezuela was also viewed as supportive to crude, as it would theoretically box out Russian supply.
PRODUCTS
Like crude oil, product prices recovered some of their losses from Monday overnight, but they were still hanging out in the lower end of Monday’s range early Tuesday. For the US petroleum stocks this week, the early Reuters poll of analysts has an average trade expectation calling for US gasoline stocks to be +400,000 barrels for the week ending January 30 and distillate stocks -3.5 million. Increased heating/power requirements likely boosted diesel consumption, but the storm also reduced travel.
NATURAL GAS
March Natural Gas was holding Monday’s low early Tuesday but was confined to the lower end of Monday’s big selloff. The forecast turned warmer after the extreme cold last week. The 6-10-day forecast today shows above normal temps creeping eastward into the eastern Midwest and below normal in retreat. The 8-14-day has below normal temps disappearing from the east and starting to emerge in the west, but when you at the maps in the whole, above normal temperatures dominate the lower 48, which points to lower natural gas production and reduces the chance of any substantial change in the current surplus in natural gas supply.
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.
