Market Report & Analysis for 1/17/2019 Morning Edition

Morning Market Overview

After two trading session on the defensive oil prices resumed their upward march in the pre-inventory report release cycle Tuesday. The selling that hit the market over the previous two sessions was mostly a round of profit taking selling as the complex has risen significantly since hitting a bottom on December 24.

The market received a boost from China as the government indicated that they planned on stimulating the economy to reverse the slowdown. On the other hand, there is a lot of uncertainty coming from the UK as Parliament voted against the Prime Minister’s deal possibly sending the Brexit into a disorderly exit from the EU.

In the afternoon the API started the weekly inventory report cycle with a smaller than expected draw in crude oil, with larger than expected builds in both distillate fuel inventories and in gasoline stocks. Total combined inventories of crude oil and products were higher on the week.

Overall the market gave back some of the pre-inventory report gains after the API inventory report release hit the media airwaves. On the financial front global equity markets were higher around the world.

The EMI Index was higher by 0.93 percent for the day with the year to date gain at 6.4 percent. All ten bourses in the Index are in positive territory for 2019 with Paris holding the worst performing spot in the Index with Brazil in the top spot with a 10.5 percent gain for the year. The higher value direction in global equity markets today was a positive 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 lower. Overall the currency markets were negative price driver for the oil complex.