Morning Market Overview

The oil market has been looking for an excuse to enter a round of profit taking selling/correction since the OPEC accord extension was announced last week. Wednesday’s larger than expected build in US gasoline inventories acted as a catalyst to send the complex lower across the board.

The industry viewed the weekly EIA inventory snapshot as bearish even though total combined stocks of crude oil and refined products declined on the week. Adding to the negativity in oil today was yet another increase in US crude oil production to another new record high at 9.707 million bpd.

When one looks at all the fundamental data the market seems to be narrowing the data down to two areas… upside growth rate of US crude oil production versus global oil demand growth rate. With OPEC set to keep the accord going to the end of next year if global oil demand growth can absorb the growth in US oil production across 2018 then there is good chance that global oil inventories will remain in a destocking pattern and work their way toward the 5-year average level.

On the financial front global equity markets were mostly lower. The Index traded lower with the US markets in negative territory throughout the US trading session. The EMI Index decreased by 0.23 percent with the year to date gain hovering around 17.8 percent.

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 28.3 percent gain for the year. The lower value direction in global equity markets was a negative price driver for the oil complex.