Market Report & Analysis for 2/4/2019 Morning Edition

Morning Market Overview

Oil prices started the early trading session Thursday on a strong note with the spot Nymex March WTI contract trading above its technical resistance level. However, by the end of the session prices drifted lower and the spot WTI contract ended the day in negative territory. RBOB ad ULSD were also lower on the day with the spot Brent the only oil commodity posting a gain for the day.

The uptrend that began on Dec 24 remains in play but is currently struggling to breakout of the sideways, choppy pattern that has evolved since the middle of January. Most of the fundamental drivers remain supportive for higher prices as supply is receding on the back of larger than expected OPEC production cuts as well as signs that the global economy may not be accelerating toward recession.

With the US Federal Reserve moving into a dovish/supportive pattern for most risk asset markets the remaining main uncertainty overhanging the market is the outcome of the China/US trade negotiations. Meetings are occurring with a deadline of March 1 to get a deal done. On the financial front global equity markets were mostly higher around the world. The EMI Index was higher by 0.89 percent for the day with the year to date gain at 8.1 percent.

All ten bourses in the Index are in positive territory for 2019 with Japan is now holding the worst performing spot in the Index with Brazil in the top spot with a 10.4 percent gain for the year. The higher value direction in global equity markets today was a positive 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.