Morning Market Overview
Oil prices remained under pressure in the early morning US trading session yesterday after a bearish weekly oil inventory report released by the EIA on Wednesday. The spot WTI contract is currently trading below the $50/bbl level as the Dec 6 OPEC meeting inches closer.
The oil complex did not get any boost from the strong global rally in equities over the last twenty four hours as oil market participants remain mostly focused on the growing surplus of oil in inventory and concern that the upcoming OPEC meeting may not result in a large enough cut to arrest the surplus in a relatively short period of time.
With Saudi Arabia continuing to insist that it will not cut production to support prices on its own and Russia signaling that a cut may not be needed it is unclear as to the outcome of next week’s meeting. Based on the trading pattern in the oil complex it would appear the market is expecting the meeting to be a non-event. On the financial front global equity markets were mostly higher with the EMI Index increasing on the day.
The EMI Index was higher by 0.45 percent for the day with the year to date gain at 2.2 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 16.1 percent gain for the year.
The higher value direction in global equity markets today was a positive 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.