Morning Market Overview

Oil prices traded on the defensive throughout most of the US trading session Wednesday even as the EIA reported a mildly bullish overall inventory snapshot. However the market focused more on the large weekly increase in US crude oil production rather than the draw in total combined stocks of crude oil and refined products.

Crude oil production jumped close to 9.8 million bpd, but total crude and refined product stocks are now 112.8 million barrels below the high hit in the middle of February. The overall market sentiment has been waning since the OPEC accord was extended with the spot WTI contract currently trading near the lower support end of the medium-term uptrend channel it has been in for months.

Many market participants headed into the OPEC meeting from the long side and since the outcome was announced we have seen a gradual reduction in the overall speculative net long positions driving prices modestly lower. On the financial front global equity markets were mixed yesterday. The Index hovered around unchanged even with the US markets in positive territory throughout the US trading session.

After the US Central Bank announced a short-term interest hike on the back of a stronger economy. The EMI Index was around unchanged with the year to date gain hovering around 19.5 percent and a new high for the year. 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 32.8 percent gain for the year.

The unchanged value direction in global equity markets today was a neutral 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.