Market Report & Analysis for 8/2/2018 Morning Edition

Morning Market Overview

The almost daily change in the market sentiment pushed oil prices strongly lower Tuesday giving back all of Monday’s gains with the spot Sep WTI contract hovering around Friday’s closing level in the pre-inventory report cycle. The market moved its focus to the production increase side of the equation sending the geopolitical production losses to the background. The view or better yet the battle between views is changing frequently and thus resulting in large intraday trading ranges and a choppy daily pattern.

The geopolitical concerns were eased slightly after President Trump said he would be willing to meet with the President of Iran with no preconditions. Whether or not such a meeting will happen is still a major question mark. Today may be a different tweet or a negative response from Iran. The market is highly impacted by the 30-second news snippets hitting the media airwaves as well as coming from Twitter.

\The EIA released their Monthly Crude oil and Nat Gas production report. The report indicated that oil production declined 30,000 bpd for the month of May to 10.442 million bpd. They also reported that US crude oil exports rose to 2.005 million bpd in May from 1.756 million bpd in April. Total US oil demand grew 1.6 percent in May versus last year for the same month. On the financial front global equity markets were mixed. The EMI Index was higher for seven of the ten bourses in the Index.

The EMI Index decreased by 0.48 percent on the day (driven mostly by a large decline in Brazil) with the year to date gain at 1.1 percent. Six 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 now moving back into the top spot with a 5 percent gain for the year. The negative value direction in global equity markets was a negative price driver for the oil complex.