Explore Special Offers & White Papers from ADMIS

Energy Markets Gyrate Wildly

CRUDE OIL

While the trade has accepted the fact that a ban on Russian energy exports is unlikely (with the US administration suggesting that would exert more harm on us than Russia) the powerful upward track in oil prices has stalled. On the other hand, the crude oil market has shown amazing resiliency over the past 2 1/2 months and the last COT positioning report showed the market to have significant residual buying capacity. In fact, given the potential to embargo supply from one of the largest energy exporters that should provide a major cushion for prices.

Like the crude oil market, the gasoline market gyrated wildly yesterday with a range of $0.19. On the other hand, a sharp range up in significant reversal overnight erodes the bullish technical condition. With fundamentals capable of changing without notice, traders should refer to classic technical signals. While it is well documented, Russian exports of energy products are extremely critical to the world market, but the lack of specific sanctions against fuel supplies and a lack of widespread global participation in the sanctions, fosters some bearish confidence.

NATURAL GAS

As indicated in petroleum coverage today, there are difficulties in implementing a broad-based blockage of Russian gas exports. In fact, there are reports overnight that extreme Russian discounts have prompted a wave of buying by European buyers especially with Russian prices below European spot prices! However, it is possible that Russia itself will resort to hitting Europe by shutting down gas pipelines in Ukraine. In fact, gas supply is already tight in Europe and cold weather is forecast for next week.

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