Tighter API Crude Oil Stocks
While the crude oil market is justified in a higher early trade today because of another draw in weekly API crude oil stocks, we leave ultimate control with the bear camp. The fear of demand destruction is clearly present from the developing pattern of soft US and global data, but also because of ideas that China will probably import less oil next month because of their crackdown on refiners and because July Chinese crude oil imports fell by 19% versus year ago levels.
Since the significant July high, the September gasoline contract has led the complex on the downside, and we think RBOB will lead the complex even lower in the days ahead.
With the October natural gas contract breaking out to the downside yesterday, the market could be headed below the $3.75 level in the days ahead. Tropical Storm Grace is expected to strengthen slightly but the projected track is not at the heart of the Gulf of Mexico offshore production area and the storm isn’t expected to reach hurricane status.
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.