Explore Special Offers & White Papers from ADMIS

Natural Gas Holds Its Ground

NATURAL GAS

Natural gas is having trouble sustaining upside momentum, but it has managed to hold its ground above last week’s low in the face of bearish supply news. January natural gas continued its coiling pattern on Tuesday and finished with a moderate gain, but it was under mild pressure overnight. Much of the US is experiencing unseasonably cold weather, which has strengthened demand for natural gas. There are indications that the Freeport LNG export terminal may not restart its operations until early 2023. The closure will continue to limit US LNG exports and result in a larger than normal storage buildup. A Reuters survey has a median expectation for a net injection of 64 bcf in Thursday’s weekly US storage report. Last week’s report showed a net injection of 79 bcf, and a year ago 23 bcf were injected. With the unseasonably cool weather, natural gas prices could remain well supported today. Look for support in January natural gas at $6.210, with resistance at $6.580.

gas stove

CRUDE OIL

While the petroleum markets continue to deal with an uncertain demand outlook, there has been a boost in supply anxiety that has helped the brakes on this week’s pullback. But to sustain a recovery move, the market will likely need bullish data from today’s EIA supply report. A report of a drone attack on a tanker in the Gulf of Oman has increased supply tensions. This has come as US and European officials are dialing back tensions after a missile landed in Poland and killed two people yesterday. Chinese industrial production and retail sales came in weaker than expected, which reinforced the demand concerns that have weighed on prices. The EIA said that US Permian Basin oil production should reach a record level in December, but they also stated that production has grown very slowly. The IEA said that the European Union’s ban on Russian seaborne oil exports and the G7’s price cap on Russian oil sales will create unprecedented uncertainty for the oil markets. After the close yesterday, the API report showed US crude oil stocks declined 5.835 million barrels last week, which was a much bigger draw than expected. Today’s EIA supply report could show a new 2 1/2 year high in US crude oil production if there is an increase from last week’s 12.1 million barrel per day reading.

 

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.

Latest News & Market Commentary

Explore Special Offers & White Papers from ADMIS

Get Started