Market Report & Analysis for 2/9/2018 Morning Edition
Morning Market Overview
An overall bearish weekly EIA oil inventory report coupled with a rising US dollar sent oil prices strongly lower Wednesday. Total US crude oil production surged to a record high well over the 10 million bpd level while crude oil stocks built for the second week in a row even as refinery utilization rates increased.
On the day it was hard to find anything supportive except possibly the global equity markets which were in recovery mode for the second session in a row.
Although refinery run rates increased it is likely the last push higher to allow refiners to do some refined product building ahead of the upcoming spring maintenance season. Medium to longer term the market is likely to move higher.
For the shorter term there still may be a further retracement before bottoming out once again. We remain of the view to reset longs once the signals suggest that the complex has stabilized. On the financial front global equity markets were mixed around the world with the US markets remaining flat. The Index still decreased with the US market trading higher through most of Wednesday’s trading session. The EMI Index decreased by 0.17 percent with the year to date gain now at 2.2 percent.
Only four 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 an 8.7 percent gain for the year. The lower value direction in global equity markets is 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 lower. Overall the currency markets were a negative price driver for the oil complex yesterday.