Market Report & Analysis for 11/16/2018 Morning Edition

Morning Market Overview

New York Mercantile Exchange oil futures nearest delivery and Brent crude on the Intercontinental Exchange FIANALLY settled higher, finding a bottom if only temporary after extensive selling that pressed the West Texas Intermediate contract to a one-year low after 12 consecutive down days—a record.

The advance followed the monthly outlook from the International Energy Agency released this morning that, along with the Energy Information Administration and the Organization of the Petroleum Exporting Countries, revised higher expected oil output for non-OPEC producers for both this year and 2019 from their October projections. However, IEA maintained their view on global oil demand for both years, indicating consumption growth would “remain solid” as lower oil prices offset slowing economic growth.

Yesterday’s gains by oil futures came alongside a weakening U.S. dollar, which traded at a 17-month high on Monday, while major U.S. equity indices were headed for another loss. The Dow Jones Industrial Average is on course to erase nearly 900 points this week, down more than 200 points in late afternoon trading. The advance came ahead of weekly supply data from the American Petroleum Institute on Wednesday afternoon and EIA’s weekly supply report due out at 11 AM ET, with both reports delayed a session by Monday’s observance of Veterans Day.

Market expectations are generally aligned that a build in commercial crude stocks and draws in oil products occurred during the week-ended Nov. 9. Commercial crude stocks are seen to have increased by about 2.5 million bbl last week, with a 1.5 million bbl draw in gasoline stocks eyed. Distillate inventory are seen to have declined by 2.0 million bbl for the week profiled.