Morning Market Overview

Oil prices stayed on the defensive yesterday ahead of today’s critical OPEC meeting and after a mixed EIA oil inventory snapshot. Prices did manage to end the trading session well off the intraday lows of the day. The EIA report, although mixed, was overall supportive in that total combined stocks of crude oil and refined products declined on the week. In addition, it seems that although OPEC and Russia agree that a cut extension should happen, but the deal should be reviewed when they meet next June.

According to Reuter’s six OPEC ministers and non-OPEC producers met ahead of today’s meeting. The group included Saudi Arabia and Russia. The group recommend extending the cuts through the end of 2018 (which is the market expectation) but Russia is supposedly suggesting an option of reviewing the deal at the next OPEC meeting if prices surged too far and too fast to the upside.

Many in the market view that comment that the deal extension is thus only a three-month extension with a possible option to continue beyond June if the market warrants. Thus, prices remained on the defensive Wednesday. Soon there will be no more guessing and the market will know the outcome and will digest the result and trade the market accordingly. On the financial front global equity markets were mixed today.

The Index traded lower even with the US markets trading in positive territory throughout the US trading session. The EMI Index decreased by 0.68 percent with the year to date gain hovering around 18.6 percent. 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 34.6 percent gain for the year. The lower value direction in global equity markets was a negative price driver for the oil complex.