Market Report & Analysis for 8/21/2018 Morning Edition

Morning Market Overview

After ending last week with the sixth weekly loss in value over the last seven weeks the oil complex traded mostly on the positive side of the ledger to start the new trading week.

Monday’s gains are attributable to a combination of a growing concern that Iranian oil exports could fall more than projected just last week as more EU companies opt out of Iran in anticipation of the US sanctions hitting. The negative in this area was China who reportedly is switching shipping its Iranian crude oil purchases to Iranian vessels to get around the sanctions. Further supporting prices is a view that the China/US trade dispute could potentially be resolved before more stringent tariffs and actions are instituted by both sides.

A new round of meetings between the US and China are set to get underway this week in the US with a ray of hope that a resolution can be ironed out. Also, the externals were supportive for oil prices today as the US dollar was lower versus most currency pairs while global equities were higher. On the financial front global equity markets were mostly higher. The EMI Index was higher for eight of the ten bourses in the Index. The EMI Index increased by 0.49 percent on the day with the year to date loss at 1 percent. Three 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 6.1 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 lower on the day with the Yen/USD and the Euro/USD higher. Overall the currency markets were a positive price driver for the oil complex.