Explore Special Offers & White Papers from ADMIS

Gas Forged Consolidation Support


With the gain in crude oil prices into the contract high yesterday clocking in at $21 above the point where the last COT positioning report was measured, the crude oil market remains only moderately overbought. Furthermore, the crude oil market yesterday forged a $10 plus trading range in a sign that hyper volatility has settled into the market, but that could also signal the potential for a corrective setback to end the week. On the other, seeing Baltic oil tanker rates reach the highest level since 2008 will likely shift more demand away from the Black Sea area. In another bullish development overnight Libya’s largest oil field was under threat of shutting down because of protests. Not surprisingly, the crude oil market fell back sharply from its highs yesterday following rumors that there could be an Iranian nuclear deal in the works.

At least in the early going today, the April gas contract appears to have forged a measure of consolidation support around the $3.25 level. While recent chart action has presented images of a blowoff top, yesterday’s action showed the largest range since November 26th and managed the action on slightly lower trading volume than was seen in the prior two trading sessions. With gasoline since the last COT positioning report climbing $0.72, we suspect the net spec and fund long has reached up to the highest level since January 2021.


While the natural gas market has been presented record high Asian and European LNG prices this week and some panic buying has been seen, reports that Cnooc has stopped placing offers on the Shanghai petroleum and natural gas exchange because of high prices is a potential major negative development. While the magnitude of the weekly withdrawal from storage was neutral to bearish for prices, the percentage deficit versus the 5-year average has become the largest of this winter and might be expected to tighten further given cold temperature forecasts for the US and Europe.

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