Market Report & Analysis for 7/16/2018 Morning Edition
Morning Market Overview
Oil prices stabilized on Thursday after Wednesday’s strong sell-off on a combination of the market re-evaluating this week’s bullish EIA weekly US oil inventory report and the IEA’s warning that the global oil supply cushion is dwindling quickly with Saudi Arabia raising production and ongoing production losses in several countries due to evolving geopolitical events. All the commodities in the oil complex moved into positive territory except for the spot WTI contract which expires next week.
The spot Sep Brent/WTI spread widened modestly firming the economics of exporting crude oil from the US. Wednesday’s strong decline did technical damage to the uptrend for oil prices and it could be the early signs that oil prices might retrace further in the coming weeks especially if all the pledged production increases materialize. On the financial front, global equity markets were higher across the board. The level of uncertainty remains at an elevated level. The EMI Index was higher for all ten bourses in the Index.
The EMI Index increased by 1.22 percent on the day with the year to date loss at 1.3 percent. Four of the ten bourses in the Index are now in positive territory for 2018 with China still in the worst performing spot in the Index with Australia in the top spot with a 4.7 percent gain for the year. The positive value direction in global equity markets was a positive price driver for the oil complex.
On the currency front the US dollar Index is higher on the day with the Yen/USD and the Euro/USD lower. Overall the currency markets were a negative price driver for the oil complex.