Morning Market Overview

Despite an overall bearish weekly inventory snapshot released by the EIA on Wednesday the oil markets moved higher after two previous days on the defensive. So far in early morning US trading oil prices are still moving higher. The EIA report showed total US combined stocks of crude oil and refined products increased modestly on the week driven by a larger than expected build in crude oil stocks.

Weekly US crude oil production increased and the latest EIA monthly oil and Nat Gas production report issued yesterday showed the average annual total US production for November of 2017 exceed 10 million bbls for the first time since October of 1970. On a positive note the externals were supportive yesterday with the US dollar back on the defensive and global equity prices recovering some of the losses from the previous two sessions.

The oil complex remains in a slowly evolving uptrend despite the declines earlier this week. OPEC remains committed and is still operating at an historical high compliance levels to the production cutting accord while global demand continues to grow on the back of a growing global economy.

On the financial front global equity markets were mixed. The Index increased with the US market trading modestly higher through Wednesday’s trading session. The EMI Index increased by 0.27 percent with the year to date gain now at 6.4 percent. Eight of the ten bourses in the Index are still in positive territory for 2018. London is in the worst performing spot in the Index with Brazil in the top spot with an 11.1 percent gain for the year.

The higher value direction in global equity markets is a positive price driver for the oil complex. On the currency front the US dollar Index was 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 yesterday.