Written Commentary
Ag Market View for Dec 13.24
December 13, 2024
CRUDE OIL
US oil rigs in operation fell by 1 last week to 478, the fifth decline in six weeks. This is the lowest they have been since December 2021 and down 11% from a year ago. However, last week’s EIA report showed US crude production reached 13.3 million barrels per day for the week ending July 5, which matched the record high from earlier this year. China’s state-owned oil and gas firm CNOOC said today that it has achieved an exploration breakthrough in Bohai Bay with the discovery of a well that has tested to produce about 201 cubic meters of crude oil and nearly 1 million cubic meters of gas. China’s refinery output fell 3.7% in June from a year earlier. The was the third straight month of declines and was the lowest in six months. This was attributed to planned maintenance and weak fuel demand. China’s GDP second-quarter GDP grew 4.7% from a year earlier, which was below expectations calling for a 5.1% increase and the second slowest gain since the first quarter of 2023. This does not bode well global for crude demand. Friday’s Commitments of Traders report showed managed money traders were net buyers of 3,723 contracts of crude oil for the week ending July 9, increasing their net long to 252,804. This is their largest net long since October but is far from the record net long of 495,975 from January 2018.
PRODUCT MARKETS
Friday’s Commitments of Traders report showed managed money traders were net buyers of 5,079 contracts of RBOB for the week ending July 9, increasing their net long to 36,308. This is at the low end of the historic range and well-below the 2024 high at 84,926. Managed money traders were net sellers of 6,625 contracts of ULSD for the week ending July 9, increasing their net short to 7,028.
NATURAL GAS
Freeport LNG’s Texas plant is reportedly on track to pull in small amounts of natural gas today after shutting down last week ahead of Hurricane Beryl. Its slow restart has been one of the things that pressured natural gas prices last week, in addition to amply supply. The weather forecast got cooler over the weekend, with the 6-10-day forecast now calling for below normal temperatures across much of the nation’s mid-section. The heat will be confined to the west, New England, and Florida. Friday’s Commitments of Traders report showed managed money traders were net sellers of 37,483 contracts of natural gas the week ending July 9, which took them from a net long position to a net short of 34,317. US gas rigs in operation fell by 1 last week to 101 but up from 97 two weeks ago. Rigs are down 25% from a year ago, but US gas storage was 9.7% above year ago levels last week and 18.7% above the five-year average.
Interested in more futures markets? Explore our Market Dashboards here.
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.
