Market Report & Analysis for 11/28/2018 Morning Edition

Morning Market Overview

Oil prices staged a slight recovery Monday in what currently appears to be just a light short covering rally after prices were destroyed last week in a shortened US holiday trading week. Oil prices were bolstered by a short covering rally in most equity markets around the world but offset somewhat by a push higher for the US dollar versus most currency pairs. Oil market participants remain focused on the potential slowing in the growth of the global economy with global oil supply remaining in an upward trajectory.

The main event on the supply side will come next week on December 6 when OPEC meets to decide if they will cut production and by how much. If they cut and it is not deep enough the market will likely resume its strong downward trend. The market has not yet been impressed by talks of a 1 to 1.4 million bpd cut. On the financial front global equity markets were mostly higher with the EMI Index still decreasing slightly on the day.

The EMI Index was lower by 0.25 percent for the day with the year to date loss at 0.1 percent. Only one 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 12 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 higher for the day with the Yen/USD and the Euro/USD lower. Overall the currency markets were a negative price driver for the oil complex last week.