Morning Market Overview

Another challenging day on Monday for the bulls in most all the asset-driven markets. Equities were hit with strong selling carrying over into the major commodities markets including oil as the US dollar Index ended the day only slightly lower providing little support for the complex.

The selling in the financial markets was the main price directional driver for the oil complex to start the trading week. Selling in stocks came from many areas with the major negative from concerns over a trade war after China announced retaliatory tariffs on select US products. In addition, the tech sector was pounded once again sending the US stock market down over 2 percent on the day.

On the oil fundamental front market participants were concerned overestimates that Russian oil production increased slightly in March (Reuter’s article) and a view that Saudi Arabia will lower its prices to Asia in May. The fundamentals were only slightly bearish with the main negativity coming from the financial markets. The next fundamental data points will come from the weekly inventory assessment cycle beginning late today with the release of the API data.

On the financial front global equity markets were mostly lower around the world with the US markets trading significantly lower throughout the session.

The EMI Index decreased by 1.17 percent with the year to date gain now at 1.3 percent. Two of the ten bourses in the Index are still in positive territory for 2018. London is in the worst performing spot in the Index with Brazil in the top spot with a 10.4 percent gain for the year. The lower value direction in global equity markets was a negative price driver for the oil complex. On the currency front, the US dollar Index was higher 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.