Morning Market Overview

Oil prices held onto modest gains throughout Tuesday’s trading session and ahead of the start of the round of the weekly oil inventory reports. The RBOB gasoline contract was the price leader increasing around 1.35 percent on the session while Brent, WTI and ULSD all increased around 0.6 percent on the session.

While the market awaited the afternoon’s fundamental snapshot most market participants remained caught between a bullish backdrop from the evolving shut down of the North Sea Forties pipeline system versus a bearish cloud emanating from rising US crude oil production. US crude oil production is now well over the high hit back in 2015 when the price of oil was basically in collapse mode.

We still do not expect any major move in prices in either direction in the short term… especially heading into the long holiday period right now. From a technical/chart perspective the market is moving in a choppy slightly upward trend since the latter part of October. Barring anything new we expect this trend to continue to slowly evolve in the coming weeks. On the financial front global equity markets were mixed after the US House of Representatives passed the new US Tax bill.

The approval and signing of the bill by President Trump seems to have already been priced into the financial markets. The Index decreased with the US markets in negative territory throughout the US trading session.

The EMI Index decreased by 0.10 percent with the year to date gain hovering around 19.4 percent and off the year to date high hit Monday. All ten bourses in the Index remain in positive territory for 2017. London is in the worst performing spot in the Index with Hong Kong still in the top spot with a 33 percent gain for the year. The slightly lower value direction in global equity markets was a neutral price driver for the oil complex.