Market Report & Analysis for 8/6/2018 Morning Edition

Morning Market Overview

After declining for the previous two sessions oil prices recovered modestly Thursday with the spot WTI contract trading very near last Friday’s settle price. The market remains uncertain and the battle between production increases versus geopolitical supply loss continues to rage on with the weekly fundamental snapshots adding another layer of volatility to the market.

This week the fundamental snapshot was bearish but the early projections for next week’s report are starting to suggest that inventories may once again be on the decline. Even with the increase in inventories crude oil stocks in Cushing are very near the lowest level over the last five years for the same timeframe with total combined stocks of crude oil and refined products still running below the five-year average.

Crude oil prices have been trading in a slightly downward sloping linear regression channel since peaking at the end of June. The trading pattern has been choppy and reflective of the changing 30 second news snippets on many things including trade wars, interest rate environment, and the many evolving geopolitical events around the world. On the financial front global equity markets were mostly lower. The EMI Index was lower for eight of the ten bourses in the Index.

The EMI Index decreased by 0.42 percent on the day with the year to date gain at 0.5 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 Brazil in the top spot with a 4.5 percent gain for the year. The negative value direction in global equity markets was a negative price driver for the oil complex.