Market Report & Analysis for 11/21/2018 Morning Edition
Morning Market Overview
As the shortened US trading week got underway the oil complex traded in a wide intraday pattern spending time in both negative and positive territory. By the end of the session the market was able to move to the positive side of the ledger as the December Nymex WTI contract expired and moved into the history books. The newly anointed spot Jan contract gained around 1.4 percent despite mixed comments floating around the media airwaves and another sell-off in global equites.
The US markets will be closed for the Thursday Thanksgiving holiday with very light trading expected in the US on Friday. US inventories will be released on their regular schedule. The complex is still in a bear market as market participants are still more concerned over the growing glut of oil forming in inventories around the world versus the comments coming from key OPEC players on a cut in production coming at the Dec 6 OPEC meeting. The market will need a significant cut in production across the entire spectrum of OPEC and their non-OPEC partners for the market to buy into global inventories reversing and moving into a sustain destocking pattern as we turn the corner to Q1. OPEC has a huge challenge ahead of their meeting as it still does not appear that everyone is on board for a significant cut in production while countries like the US continue to increase production and take market share away from traditional OPEC suppliers.
On the financial front global equity markets were mostly lower with the EMI Index decreasing on the day. The EMI Index was lower by 0.61 percent for the day with the year to date gain at 1.3 percent. Only two of the ten bourses in the Index are in positive territory for 2018 with China holding the worst performing spot in the Index with Brazil in the top spot with a 15.1 percent gain for the year. The lower value direction in global equity markets today was a negative 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 last week.
