Sharp Declines in Petroleum Markets
In addition to significant chart damage in crude oil to start today the WTI market is feeling the pressure of the first decline in Brent crude oil below the psychological $41.00 level since the key June consolidation lows. Adding into the negative bias is news that Saudi Arabia has moved to reduce prices to Asian customers in-an-attempt to facilitate demand and maintain market share. It would appear as if the definitive negative track in global energy prices is further linked to the deterioration in global energy demand views as the worldwide infection problem continues to extend thereby leaving a large portion of the world under restricted movement status.
With news overnight that Chinese coal imports continue to drop sharply and the Chinese government indicating a shift toward cleaner fuels it is increasingly more likely that the rally in gas prices over the past 2 months and the ability to hold above $2.40 is the result of expectations for a significant jump in Chinese LNG demand. In fact, the trade minister in Singapore has suggested there has been a wave of companies moving to open LNG trading desks in the country and that area usually trades into China.
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.