Market Report & Analysis for 7/25/2018 Morning Edition

Morning Market Overview

Not surprisingly oil trading was volatile Monday with prices ending the session mixed. The market started higher in the overnight trading session as the rhetoric between Iran and the US intensified with comments coming from the Iranian Supreme leader and responded to with a strong tweet by President Trump.

The type of threatening comments coming from Iran are very typical of comments over the years about blocking the flow of oil from the Middle East. However, this time around they are dealing with a US leader that seems very strong on protecting US and US interests. By the afternoon the market started to discount the comments with prices returning to negative territory and following the trend in oil prices that has been in play for the last three weeks.

The increased supply view offsetting the geopolitical loss in supply continues to be winning the ongoing battle starting the fourth week in a row. On the financial front global equity markets were mostly lower. The level of uncertainty remains at an elevated level as talks of trade wars continues to rattle all the financial markets.

The EMI Index was higher for only three of the ten bourses in the Index. The EMI Index decreased by 0.52 percent on the day with the year to date loss at 0.1 percent. Five of the ten bourses in the Index are still in positive territory for 2018 with China still in the worst performing spot in the Index with Australia in the top spot with a 4.2 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 is higher on the day with the Yen/USD and the Euro/USD mixed. Overall the currency markets were a negative price driver for the oil complex.