Written Commentary
CRUDE OIL
February Crude Oil was lower early Monday but managed to reverse that and move to higher on the day as the session progressed. The market initially viewed the capture of Venezuelan President Maduro by US troops and remarks by US President Trump that the US intends to restore Venezuela oil production as negative for prices on ideas it would eventually lead to higher supply, but it will take some time to restore Venezuela’s capacity to where it was. The fact that Maduro loyalists remain in charge of Venezuela also suggests that it may be difficult for US oil companies to effect a change, but after first denouncing Maduro’s capture the acting president Delcy Rodriguez appeared less defiant on Sunday, saying it was a priority to have respectful relations with Washington. In the meantime, the state-run oil company PDVSA has begun cutting crude production because it is running out of storage capacity due to the US blockade.
PRODUCTS
February RBOB fell to its lowest level since April early Monday, but was higher on the day later in the session in line with action in crude oil. In similar fashion, February ULSD bounced off its October low. Last week’s EIA report was decidedly bearish for gasoline and diesel with US gasoline and distillate stocks climbing more than expected.
NATURAL GAS
March Natural Gas gapped lower early Monday and fell to its lowest level since July 2021. The nearby contract fell to its lowest level since October. Mild weather returning to the eastern US this week lowers demand expectations. The 6-10 day forecast shows above normal temperatures covering the northern US, with normal temps showing up in the southern half of Texas and the southeast. The 8-14 day has normal temps over most of the eastern US, but it is not below normal.
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.
