Morning Market Overview
Oil prices continued their push higher Monday with the spot Nymex Feb WTO contract ending the session hovering around the medium-term resistance area. The contract did breach the resistance level on an intraday basis but did not settle above it. The market has been in a mild upward sloping recovery rally that began on Dec 24. The market remains on the cusp of a breakout to the upside.
Yesterday the complex got support from an article indicating that un-named OPEC sources said Saudi Arabia is cutting production deeper than originally thought and is expected to cut its production by 800,000 bpd compared to November levels. If the information is correct Saud Arabia seems determined to return oil prices to higher levels to support their large increase in their government spending budget.
On the financial front global equity markets were volatile and mostly higher around the world. The EMI Index was higher by 0.57 percent for the day with the year to date gain at 3.6 percent. Nine of the 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 7.5 percent gain for the year. The higher value direction in global equity markets were 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 mixed. Overall the currency markets were a positive price driver for the oil complex.