Morning Market Overview

—> Market commentaries will not be updated on Thursday and Friday <— —> as our staff observes Thanksgiving. Price forecasts will be <— —> updated and accurate. <—

Crude is seen higher this morning while products are lagging as liquidity and volume wane ahead of the holiday. Oil prices rebounded on Tuesday ahead of the start of the weekly oil inventory cycle. Oil prices remain in a trading range as market participants start to head to the sidelines ahead of the US Thanksgiving Holiday on Thursday and next week’s OPEC meeting on Nov 30. The market is still expecting OPEC will extend the accord through the end of next year. As we have mentioned several times if an extension is not announced next week there will be a quick and sharp sell-off which could send WTI back below the $50/bbl level.

We, like most of the market expect the accord will be extended through December of 2018. At this point oil prices have been trading at a high enough level for several months providing a window for US shale producers to add forward hedges to their portfolio. As such even if OPEC disappoints the market at the meeting and prices do sell-off US crude oil production is likely to continue to grow at least in the medium term.

At this point we believe OPEC has no choice but to extend the accord. On the financial front global equity markets were higher across the board. The Index traded higher with the US markets trading in positive territory throughout the US trading session. The EMI Index increased by 1.12 percent with the year to date gain hovering around 19.6 percent and a new high for the year. All ten bourses in the Index remain in positive territory for 2017.

London is in the worst performing spot in the Index with Hong Kong still in the top spot with a 35.5 percent gain for the year. The higher value direction in global equity markets yesterday was a positive price driver for the oil complex. On the currency front the US dollar Index traded lower for the day with the Yen/USD and the Euro/USD higher. Overall the currency markets were a positive price driver for the oil complex today.