Market Report & Analysis for 1/7/2019 Morning Edition

by | Jan 4, 2019 | EMI, Fuels & Markets, FutureRack, Industry News

Morning Market Overview

Despite another pounding in the global equity markets, the oil complex was able to end the pre-inventory report release trading session in positive territory on Thursday. Not much has changed as market participants remain concerned over the potential for a demand slowdown as the global economy appears to be slowing.

As discussed yesterday the China PMI number dropping below the 50-threshold added to the demand slowing concerns as well as a disappointing PMI from the US yesterday. Saudi Arabia and its OPEC and non-OPEC partners are all cutting productions, but it remains to be seen if the cuts will be enough to offset the projected growth in US production and the possible decline in global demand and still result in world inventories entering a sustainable destocking pattern.

Around the middle of the month, the three agencies (EIA, IEA, and OPEC) will release their January oil market projections which will be widely scrutinized as traders and investors continue to position themselves for the coming months.

On the financial front, global equity markets were volatile and mostly lower around the world. However, with a strong gain coming from Brazil the EMI Index was higher by 0.99 percent for the day with the year to date gain at 1.8 percent. Only one of the ten bourses in the Index are in positive territory for 2019 with Hong Kong holding the worst performing spot in the Index with Brazil in the top spot with a 6.5 percent gain for the year. The higher value direction in global equity markets was a positive 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.