Morning Market Overview

Crude and products are currently mixed on Thursday morning.

Crude and distillate products are weakly higher while gasoline is on the defensive. In the pre-inventory report release Wednesday oil prices were lower across the board.

The crack spreads widened as the industry moves closer to the spring refinery maintenance season with the market expecting another reduction in refinery run rates in this week’s EIA report due out this morning. Market participants are mostly focused on the short term fundamental reports as the externals were mixed today with equities higher (supportive for oil prices) but with a rising US dollar (negative for oil prices).

Over the last three weeks or so most of he short to medium term fundamental data points have been biased to the bearish side. Crude oil futures prices are still well off the highs hit toward the end of January as many market participants have moved to the sidelines as they sort out the implication on inventories as the refinery maintenance season gets underway.

During the afternoon the API started the weekly inventory report cycle with a supportive inventory snapshot. Crude oil, and distillate fuel stocks declined more than the expectations while gasoline built. The total combined inventories of crude oil and products were modestly lower on the week. Overall the market pared some of its intraday losses after the report was issued. On the financial front global equity markets were mostly higher around the world with the US markets gaining value today. The Index was higher with the US market higher throughout the trading session.

The EMI Index increased by 0.86 percent with the year to date gain now at 4.8 percent. Three 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 a 14.2 percent gain for the year. The higher value direction in global equity markets is a positive price driver for the oil complex.