Market Report & Analysis for 10/24/2018 Morning Edition

Morning Market Overview

Oil prices started the week positive, drifted lower and then moved back into positive territory near the close. With the new round of Iranian sanctions just two weeks away market participants are becoming more convinced that global supply and demand balances will remain balanced if not biased to the surplus side as the market moves into 2019.

Despite the controversy surrounding Saudi Arabia after the killing of Washington Post reporter Khashoggi the Saudi Energy Minister said today (Reuters) that his country has no intention of a 1973 style embargo in the west who are talking sanctions. The energy ministry talked more about increasing production to 11 million bpd soon with capacity to increase production to 12 million bpd in an interview with the Russian TASS news agency. With inventories growing in major markets like the US as well as production continuing to rise in non- OPEC countries (US for example) there are not yet any signs that there will be any supply issues as the sanctions are implemented.

On the financial front global equity markets were mixed on the day with Asia mostly higher and the west mostly lower.

The EMI Index increased by 0.86 percent on the day. The year to date gain is now at 1.3 percent. Only two 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 Brazil now in the top spot with a 12.8 percent gain for the year.

The positive value direction in global equity markets was a positive 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.