Morning Market Overview

As of this writing, crude, gasoline, and diesel prices are all trading lower in brisk profit taking trade.

Oil prices rose for a third day Thursday after a survey showed strong compliance with output cuts by OPEC and others including Russia, offsetting concerns about surging U.S. production. Production by OPEC rose in January from an eight-month low as higher output from Nigeria and Saudi Arabia offset a further decline in Venezuela and strong compliance with a supply reduction pact, a Reuters survey showed. OPEC pumped 32.4 million barrels per day (bpd) in January, the survey found, up 100,000 bpd from December.

Last month’s total was revised down by 110,000 bpd to the lowest since April 2017. As we discussed yesterday 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 a historical high compliance level to the production cutting accord while global demand continues to grow on the back of a growing global economy.

We are maintaining our overall oil view and short-term bias at cautiously bullish with a bias to the upside. The current fundamentals may be starting to turn toward the bullish side as the rebalancing process of the global oil market is still underway.

Market uncertainty seems to remain elevated.