Market Report & Analysis for 2/21/2019 Morning Edition
Morning Market Overview
Oil prices were mixed in the US trading session Tuesday with crude oil higher and hovering near the highest level of 2019 while refined products were on the defensive but still in an overall uptrend. The ongoing planned production cuts by OPEC and its partners along with declining production for both Iran and Venezuela due to sanctions remain the main upward driver for prices.
For now, the market is convinced supply cuts will result in global inventories entering a sustainable destocking pattern. Offsetting the enthusiasm is concern over what the outcome of the US China trade talks will bring as well as the overall state of the global economy.
According to comments from both the US and China progress was made last week in the negotiations in China with talks are resuming this week in Washington DC. There are less than two weeks to the deadline imposed by President Trump although he said last week he might be willing to extend the deadline if progress is being made. On the global front the US economy seems stable and expanding with concerns coming from Europe and China. If the global economy does slow global oil demand growth would also decline putting more pressure on OPEC if they want to push oil prices higher. The overall oil market sentiment remains cautiously bullish and in a slowly evolving uptrend since hitting a bottom on Dec 24.
On the financial front global equity markets were mixed around the world with Brazilian equities declining sharply and pushing the overall EMI Index lower for the day. The EMI Index was lower by 0.50 percent for the day with the year to date gain at 9.3 percent. All ten bourses in the Index are in positive territory for 2019 with Japan holding the worst performing spot in the Index with Canada in the top spot with an 11.2 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 lower for the day with the Yen/USD and the Euro/USD mixed. Overall the currency markets were a positive price driver for the oil complex.
