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Energy Markets Lower


While fading the uptrend action in crude oil over the past 2 1/2 months has been a losing proposition, it would appear as if prices have lost upside momentum, the trade is seeing a rising threat against US demand and the bulls have encountered a number of bearish developments overnight. Certainly, the threat of returning to closure in a growing portion of the US from the infection spread is back in the windshield but seeing a crude oil inventory increase of 2 million barrels from the API, an uptick in weekly European crude storage levels and a reduction in the magnitude of the contraction in US oil production forecast for the EIA adds to the bearish condition.


We suspect that the net spec and fund short in the natural gas market has been reversed with the recent rally and that could leave the market vulnerable to corrective action especially given a slight narrowing of the area of much above normal temperatures in the latest US outlook. However the gas market might derive some support from EIA forecasts that US dry natural gas production for 2020 would be only 89.24 BCFD in July compared to a previous forecast of 89.65 BCFD.

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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