Morning Market Overview

Oil prices traded mostly lower in the pre-inventory report session on Tuesday.

At one-point oil prices did rally early in the day after a data point suggesting that inflation was still not a big risk. However, the market then moved lower following a downturn in US equities that was not offset by a fall in the US dollar versus most major currency pairs.

Market participants continue to move back and forth between the short-term fundamentals and the externals for oil price directional guidance. The fundamental data has been biased to the bearish side over the last several weeks while the external price drivers have been experiencing an above normal level of volatility resulting in choppy trading in both the equity and currency markets. As such oil prices have also been volatile and choppy with the markets remaining in a downward sloping technical trading channel.

On the financial front global equity markets were mostly lower around the world with the US markets lower. The US complex was weak throughout most of the US trading session.

The EMI Index decreased by 0.33 percent with the year to date gain now at 4.5 percent. 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 a 13.2 percent gain for the year.

The lower value direction in global equity markets is a negative price driver for the oil complex.