Morning Market Overview

Oil prices shrugged off a negative start to the trading session Wednesday and ended the day strongly higher. A combination of a slightly supportive weekly EIA oil inventory snapshot along with a falling US dollar and rising equity values were the main catalysts to push prices higher.

Oil prices have been under pressure since hitting a peak at the end of January. The decline accelerated after a sell-off in equities coupled with several bearish fundamental data points. Wednesday’s push higher is just one day’s trading and does not necessarily mean that the decline is over. The move could turn out to be more of a short covering rally rather than the start of a new leg higher for prices.

From a technical perspective, the market will have to firmly establish a bottom and spend a few days moving higher to rebuild the market sentiment back to a more bullish viewpoint. On the financial front, global equity markets were mostly higher around the world with the US markets staging another modest upside rally. The Index was higher with the US market higher throughout the trading session.

The EMI Index increased by 1.89 percent with the year to date gain now at 1.9 percent. Three of the ten bourses in the Index are still in positive territory for 2018. Japan is in the worst performing spot in the Index with Brazil in the top spot with a 9.4 percent gain for the year. The higher value direction in global equity markets 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