Written Commentary
NATURAL GAS
July Natural Gas pushed higher yesterday despite a bearish EIA storage report and a resumption of Norwegian gas flows to Britain, as the US faces its first widespread heat wave of the summer. The 6-10 day forecast has above normal temperature centered over the northern Plains, the Rocky Mountain states and the desert Southwestern US, and the 8-14 day has that extending over the eastern ¾ of the nation, from the Rockies to the east coast. The weekly EIA Natural Gas storage report released during the session yesterday showed a net injection of 98 bcf for the week ending May 31, which was well above expectations calling for 89-91. This brought total gas in storage to 2,893 bcf, up from 2,520 a year ago and above the five-year average of 2,312. The gain over year-ago levels has narrow slightly over the past four weeks. Norwegian gas flows to Britain resumed today at the rate of 44.5 million cubic meters per day today, this was close to their forecast of 45 million yesterday and up from 35 million forecast on Wednesday. Capacity is 79.8 million per day when fully operational. China’s National Offshore Oil Corp (CNOOC) announced yesterday that it had achieved a major exploration breakthrough in for natural in the South China Seas. The field is expected to produce 10 mcm/day.
CRUDE OIL
July Crude Oil was near unchanged overnight following two days of recovery from Monday’s selloff. The Saudi Oil Minister attempted some damage control yesterday after the OPEC+ meeting results on Sunday suggested that some members could phase out voluntary cuts of 2.2 million barrels per day beginning in October. The Minister said yesterday that OPEC+ can pause or reverse oil production increases if the market weakens, and this seemed to support the market. Trade expectations call for a mostly uneventful US jobs report this morning, not enough to alter expectations that for the Fed to keep rates steady at their July meeting. Average expectations call for nonfarm payrolls to be up 185,000 from April, unemployment unchanged at 3.9%, and average hourly earnings up 0.3% on the month (+3.9% on the year). The ECB cut its deposit rate from 3.75% to 4% yesterday, which was mostly as expected, but it was viewed as supportive to demand. China’s crude oil imports in May totaled the equivalent of 11.06 million bpd in May. This was up from 10.88 million in April but down from 12.11 in May 2023. Large state-run refineries were undergoing regular maintenance. Above ground inventories totaled 946 million barrels, the highest since the end of 2023.
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.
