Morning Market Overview

Oil prices were unimpressed with a mostly neutral weekly oil fundamental snapshot issued by the EIA on Wednesday.

Total combined stocks of crude oil and refined products were around unchanged on the week and remain significantly below the high hit in Feb of 2017 and inching closer to the five-year average or the level OPEC is hoping global inventories will move to in a reasonable period. Downward pressure on oil prices also came from the externals as equities were strongly lower while the US dollar was slightly higher versus most currency pairs.

The selling in equities came from the ongoing angst over whether the US will impose tariffs on both steel and aluminum and risk a potential trade war. There is a divided view as to first whether President Trump will even impose the tariffs or is he setting up negotiations on trade and if he did impose the tariffs what the implications will be on the US and global economy.

At a minimum, it is elevating the volatility level in all the financial markets and thus rolling into the commodity market like oil. On the financial front global equity markets were mostly lower around the world with the US markets strongly lower Wednesday as equity market players remain uncertain over the pending tariffs that may be imposed by the US. The Index was lower with the US market lower throughout most of the trading session.

The EMI Index decreased by 0.42 percent with the year to date gain now at 2.7 percent. Three 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 11.6 percent gain for the year.

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