Market Report & Analysis for 10/2/2018 Morning Edition

Morning Market Overview

Oil prices surged higher on Monday adding to last week’s gains on a combination of upcoming US sanctions on Iran as well as relief that a new NAFTA deal has been agreed by US, Canada and Mexico. Oil is back to trading at 2014 levels as uncertainty over the impact from new sanctions scheduled to be put in place in early November on Iran. According to a Reuter’s survey OPEC production increases in September were limited to the cut in Iranian supply for marginal increase in overall OPEC production. On the interesting side of the equation the head of the National Iranian Oil Company (NIOC) said Iran has no plans to cut production (Reuter’s story).

The drama continues as there are still no visible signs that the US and Iran have entered any form of negotiations to tweak the existing nuclear accord that the US has removed itself from. On the financial front global equity markets were mixed. The EMI Index was higher for seven of the ten bourses in the Index.

The EMI Index decreased by 0.08 percent on the day with the year to gain at 1.3 percent. Five of the ten bourses in the Index are still in positive territory for 2018 with China still in the worst performing spot in the Index with the US in the top spot with a 7.8 percent gain for the year. The slight negative value direction in global equity markets was a neutral price driver for the oil complex.

On the currency front the US dollar Index is higher on the day with the Yen/USD and the Euro/USD lower. Overall the currency markets were a negative for the oil complex.