Explore Special Offers & White Papers from ADMIS

Lower Energy Markets


It finally happened: the high flying energy markets reversed hard yesterday with the markets primarily upended by a resurgence of demand fears in the wake of another very significant one day jump in US coronavirus infection counts. Furthermore with the surge in US infection counts continuing overnight and a fresh lower low for the move early today, traders should expect further declines. Cushioning the market against outside macroeconomic selling pressure is news that Chinese July imports of US crude oil registered a record reading.


The pattern of new contract lows in natural gas has been extended again overnight and we expect to see even more contract lows ahead. Even the fundamental condition favors the bear camp as the market this week was presented with news that US electricity output this week fell 4% from year ago levels which suggests demand recovery for gas remains elusive. Furthermore, with the recent net spec and fund short in natural gas at only 39,000 contracts (compared to the 218,727 contracts net short in January) there would appear to be plenty of technical selling fuel left in the market.

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.

Latest News & Market Commentary

Explore Special Offers & White Papers from ADMIS

Get Started