Morning Market Overview

In a light holiday trading session in the US Monday oil prices started the day in negative territory but were able to claw their way higher by late afternoon.

There was nothing new on the fundamental front with many market participants gaining confidence that global oil inventories are in a destocking pattern and the probability of inventories returning to the five- year average is increasing. Further supporting oil prices on Monday was a weak US dollar versus most major currency pairs. A declining US dollar is inversely proportional to the direction of oil prices and most other commodities.

The US dollar decline was mostly driven by strength coming from the euro as currency traders are expecting the ECB to start to reduce their easy money policy as the European economy is starting to grow. On the financial front global equity markets were mixed. The Index increased with the US markets closed for the Martin Luther King Holiday. The EMI Index increased by 0.23 percent with the year to date gain now at 3.7 percent.

All ten bourses in the Index are now in positive territory for 2018. Australia is in the worst performing spot in the Index with Hong Kong in the top spot with a 4.7 percent gain for the year. The higher value direction in global equity markets yesterday was a positive price driver for the oil complex.

On the currency front the US dollar Index was lower for the day with the Yen/USD and the Euro/USD higher. Overall the currency markets were a positive price driver for the oil complex.