Market Report & Analysis for 5/7/2018 Morning Edition
Morning Market Overview
Another choppy volatile trading session in the oil pits as market participants weighed the wide swings in the external markets while refocusing on the ongoing OPEC cuts and concerns over the Iran nuclear deal. The US will have to decide by May 12 if they will continue with the deal as is or revoke it and re-introduce sanctions. Iran raised the rhetoric Thursday suggesting they would not renegotiate the deal.
Once again oil was able to work its way back into positive territory for the session after starting the day lower. This has been a very interesting trading week with crude oil prices remaining in a choppy trading range since the 18th of April. The evolving geopolitical situation in the middle east is acting as a floor while rising US crude oil production is starting to act as a fundamental resistance level.
Within the range the market is moving on the volatile trading taking place in the global equity markets and the direction of the US dollar. In the for-interest area Reuters reported that TransCanada is planning to start preliminary work on its Keystone XL project in Montana in the fall of 2018 ahead of full construction in 2019. Barring any further delays in a project that has been delayed for years a significant increase in Canadian crude exports will emerge once the line is done. On the financial front global equity markets were mixed on Thursday.
The EMI Index ended the trading day lower with US equities about unchanged. The EMI Index decreased 0.63 percent on the day with the year to date gain at 2.8 percent. Four of the ten bourses in the Index remain in positive territory for 2018 with China still holding the worst performing spot in the Index with Brazil in the top spot with a 9.6 percent gain for the year.
The negative value direction in global equity markets today was a negative price driver for the oil complex. On the currency front the US dollar Index traded 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.