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Energies Mixed

CRUDE OIL

All things considered, the action in the crude oil market to start the trading week has been impressive as reports of slackening Chinese crude oil import activity ahead and ongoing fears of a return to lockdown in certain areas of the US could have prompted aggressive demand destruction selling. Unfortunately for the bull camp US energy demand concerns continue to rise with state governments rolling back activity again. However, it is difficult to discount the potential for further “improvement” in Chinese oil demand as China saw favorable Manufacturing and Non-manufacturing PMI readings overnight.

NATURAL GAS

Increasing seasonal demand is making it difficult for the bear camp to attack the short covering rally. It is also possible that a veritable avalanche of dialogue projecting even more aggressive shutdowns of drilling activity (one estimate projected oil and gas investments to drop by nearly 23% this year Fitch) and signs that Chinese domestic demand for LNG is recovering along with their economy is scaring some would-be sellers.

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.

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