Market Report & Analysis for 2/25/2019 Morning Edition

Morning Market Overview

Oil prices traded in sync with the outcome of the EIA weekly inventory report. Crude oil prices were lower after a larger than expected build in crude oil inventories while refined product prices gained value on a draw in gasoline and distillate fuel stocks. Further adding to the downside push on crude oil prices was another record crude oil production level also reported by the EIA.

Although OPEC has been complying at a high level to their agreed production cuts inventories are still running at an above normal level as market participants wait for a sustained destocking pattern to get underway.

With US production continuing to grow OPEC is going to have to reman diligent especially if Venezuela does oust Maduro as it could quickly result in a strong bump up in Venezuelan crude oil exports putting pressure on prices and OPEC. On the financial front global equity markets were mixed around the world pushing the overall EMI Index lower for the day.

The EMI Index was lower by 0.42 percent for the day with the year to date gain at 9.7 percent. All ten bourses in the Index are in positive territory for 2019 with London holding the worst performing spot in the Index with Canada in the top spot with an 11.7 percent gain for the year. The lower value direction in global equity markets 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.