Morning Market Overview

Monday was yet another volatile trading session in the oil pits as well as many other asset markets. Oil started the day under pressure as the US dollar Index was higher and equities were mostly lower around the world… both negative price directional catalysts for oil.

However, oil made a mid-day turnaround as market participants began worrying about the possibility of renewed sanctions on Iran could result in a move lower in crude supply from Iran. Oil like most other markets has been trading in a very short-term pattern of wide intraday moves as each news item hits the media airwaves.

Medium term view is still to the upside as the fundamentals remain bullish with this week’s EIA inventory snapshot likely to provide additional upside support. Genscape released their weekly Cushing crude oil inventory data point which showed the second weekly decline in a row suggesting the EIA data will likely be in sync with the Genscape data point. On the financial front global equity markets were mixed on Monday.

The EMI Index ended the trading day lower with a modest decline in US equities. The EMI Index decreased 0.13 percent on the day with the year to date gain at 3.3 percent. Three of the ten bourses in the Index remain in positive territory for 2018 with China is now holding the worst performing spot in the Index with Brazil in the top spot with an 11.7 percent gain for the year.

The negative value direction in global equity markets was a negative price driver for the oil complex. On the currency front the US dollar Index traded 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.