Morning Market Overview

In the pre-inventory report cycle underway on Wednesday the oil complex started out trading in negative territory but was able to claw its way back to the positive side of the ledger before the API data was released.

Not much new on the international oil front with most in the complex awaiting the weekly inventory data.

The market is expecting a draw in crude oil and distillate fuel stocks and a modest build in gasoline as refinery runs are forecast to decline a tad. Market participants are looking for any signs that the destocking of US combined inventories is slowing. Heading into this week’s report total combined stocks of crude oil and refined products are lower by 140.2 million barrels compared to the peak hit in the middle of February of 2017.

They are also now above the five-year average by only 53.7 million barrels. OPEC’s objective is to see global stocks return to the five-year average. The US is well on the way to meeting that goal. On the financial front global equity markets were mixed yesterday. The Index increased with the US markets trading strongly higher.

The EMI Index increased by 0.67 percent with the year to date gain now at 4.8 percent. Nine of the ten bourses in the Index are now in positive territory for 2018. Australia is in the worst performing spot in the Index with Hong Kong in the top spot with a 6.9 percent gain for the year. The higher value direction in global equity markets was a positive price driver for the oil complex.