Market Report & Analysis for 5/18/2018 Morning Edition
Morning Market Overview
Oil prices regained their footing after starting Wednesday’s session lower. The weekly EIA inventory snapshot was mildly bullish as total combined stocks of crude oil and refined products declined on the week.
The EIA report highlighted a new record for US crude oil exports of 2.6 million bpd reflecting a combination of ample US supplies and strong export economics as the Brent/WTI spread hit the highest level in three years. The main oil commodity mover today was RBOB gasoline as inventories declined strongly and more than the market expectations as the industry is just weeks away from the start of the higher demand gasoline driving season.
Total gasoline stocks are still running below last year for the same week and if the destocking pattern continues at above normal levels it could suggest potential supply issues this summer. With the short and medium-term fundamentals remaining supportive and with a plethora of geopolitical issues continuing to bubble up around the world… in particular in the Middle East… the market is likely to move higher in the coming weeks.
On the financial front global equity markets were mixed yesterday. The EMI Index was lower even after a modest increase in US equities. The EMI Index decreased 0.06 percent on the day with the year to date gain at 5 percent. Seven of the ten bourses in the Index are in positive territory for 2018 with China still holding the worst performing spot in the Index with Brazil in the top spot with a 11.4 percent gain for the year.
The negative value direction in global equity markets was a negative price driver for the oil complex. On the currency front the US dollar Index is higher on the day with the Yen/USD and the Euro/USD mixed. Overall the currency markets were a negative price driver for the oil complex.