Written Commentary
CRUDE OIL
Bullish resiliency continues in the petroleum markets with the fear of contagion/expansion of hostility in the Middle East the primary driving force. In fact, Israel looks poised to launch a ground war in Gaza with military experts predicting an Israeli version of “shock and awe” which is an attempt to use overwhelming strength. Obviously, many bearish headline developments typically capable of impacting crude oil prices will be discounted or ignored with a highly charged political divide raising temperatures of Israelis Israeli supporters, Palestinians, and a portion of the Arab world. Therefore, news overnight that Venezuela is working to reestablish international relationships with past customers and inflows of restricted energy production technology to Venezuela resuming, offer bearish supply storylines but they are unlikely to have any influence.
NATURAL GAS
As we indicated in coverage yesterday, the risk of large weekly injections to EIA natural gas storage ahead are rising and with this week’s injection at the top end of estimates, we expect a triple digit injection next week. While not an impact on prices today, Finland indicates they now have concrete evidence of sabotage of their pipeline and while they do not have physical proof Russia carried out the attack, they say there is significant circumstantial evidence they were involved. Mild temps prevail, but patterns are likely to shift next week. The path of least resistance remains down as this week’s injection was at the upper end of estimates, the surplus to 5-year average storage levels increased, there were reports of record US production from earlier in the week, and the market has seen fresh technical damage this morning.
Interested in more futures markets? Explore our Market Dashboards here.
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.
