Morning Market Overview

Oil prices stated the trading session in negative territory Thursday but were able to claw their way back into positive territory by the end of the day.

The IEA released their monthly oil forecast which was biased to the bearish side as was the EIA STEO report from Tuesday. The IEA is expecting 2018 to be a year of two markets. The first half surplus with the second half showing an offsetting deficit resulting in the entire year coming in about balanced.

Market participants continue to go back and forth as to how much emphasis to place on the ongoing shut down of the Forties pipeline system. It is a large volume of oil that is not flowing to the marketplace. It will result in inventories being drawn down which is bullish. However, the void in supply left by the pipeline shut down will easily be met by exports from the US and elsewhere and if the issue becomes of greater concern the IEA can always trigger their supply sharing agreement which will put a cap on any Forties led rally.

On the financial front global equity markets were lower across the board. The Index declined with the US markets in negative territory throughout the US trading session. The EMI Index was declined by 0.50 percent with the year to date gain hovering around 18.6 percent and off the recent 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 32.6 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 mixed. Overall the currency markets were a negative price driver for the oil complex Thursday.