Market Report & Analysis for 9/13/2018 Morning Edition

by | Sep 12, 2018 | EMI, Fuels & Markets, FutureRack, Industry News

Morning Market Overview

Oil prices soared Tuesday on a combination of the geopolitical risk in Libya elevating after a shooting yesterday as well as with the advent of an extremely active level of tropical storms in the Atlantic and possibly in the Gulf. In addition, as we move closer and closer to early November the possibility of the US implementing sanctions on Iran.

Further supporting prices is the EIA report suggesting the US production may grow slightly slower in 2019 than originally expected. The many logistics issues especially from the Permian region are finally starting to work its way into the forecast period. New pipeline capacity is not scheduled to come onstream until end of 2019 or into 2020.

Additionally the API started the weekly inventory report cycle with a much larger than expected draw in crude oil stocks with both gasoline and distillate fuel inventories building more than expected. Total combined inventories of crude oil and products were lower on the week. Overall the market increased further from the pre-inventory report release once the report was hit the media airwaves. On the financial front global equity markets were mostly lower.

The EMI Index was lower for five of the ten bourses in the Index. The EMI Index decreased by 0.91 percent on the day with the year to loss at 2.9 percent. Two 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 the US in the top spot with a 5.1 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 lower. Overall the currency markets were a negative.