Energy Demand Fears Return
We continue to view the set up in the crude oil market as negative, with demand fears given added impetus by the likely return to stringent UK lockdown rules, overnight chatter that China has temporarily slowed purchases for reserves, a slight increase in floating storage off Europe, further news that Libya will resume crude oil exports, a delayed restart in a large crude consuming US refinery (Port Arthur) and signs that the dollar has returned to an uptrend.
We are very surprised with the natural gas market’s ability to stand up against the trend of weakness in nearly all physical commodity markets especially against the washout in Petroleum prices. Apparently, the natural gas trade was caught leaning too far to the short side with lingering Gulf of Mexico production closures, a very active weather pattern in the Atlantic, a sharp jump in British wholesale gas prices this past weekend and talk of significant increases in US LNG exports next month.
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.