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Crude Oil Rising


While the August crude oil contract did not hold a 4 day high yesterday into the close, this morning it is clear that prices can continue to rise without a definitively positive global view operating in the marketplace. However, the trade should be supported as a result of the latest EIA US oil production figures (for April) which showed a decline of 669,000 barrels per day from the month of March but also because of a much larger than expected API crude stock decline last night of 8.2 million barrels.


We remain highly skeptical of the natural gas market’s capacity to extend this week’s early recovery bounce and the failure to sustain gains following news yesterday that US natural gas production declined by 2.5% in April (we think that decline took place before the largest declines in production were expected in May and June) is a sign that the recent rally was simple short covering with only a small measure of long term buying.

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.

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