On the equity front the global equity markets are also in recovery stage overnight as shown in the EMI Global Equity Index table below. The EMI Index has recovered all of its losses for this week and is now sitting at the same level it was at to end last week. In fact over the last 24 hours the only bourse that did not gain ground was the US Dow. However, as of this writing, US equity futures are currently in positive territory and are pointing to early gains when the US equity markets open in a few hours. At the moment the global equity markets are also supportive for oil and other commodity prices.
The oil relief rally got underway shortly after the API released their weekly oil inventory report late yesterday afternoon. The API report was mixed but mostly bullish on several counts. The API reported a crude oil inventory build of about 2.7 million barrels as refinery utilization rates decreased by 0.5% to 81.7% of capacity. The API reported a big decline in crude oil stocks in Cushing, Ok of about 1.5 million barrels or the largest one week decline in a long time (over a year). They showed another large surprise decline in inventory for distillate fuel and a modest decline in gasoline stocks. The market was expecting builds in both gasoline and distillate fuel this week. On the week gasoline stocks decreased by about 700,000 barrels while distillate fuel stocks were lower by about 2.8 million. The results of the API report are summarized in the following table. So far the reaction to the API report has been bullish as the market has been in relief rally mode throughout the overnight trading session. If Wednesday’s EIA report is in sync with the API report I would view it as bullish and it is likely to result in an extensions of the rally that is currently in place. If the EIA data is in agreement with the API data it will not signal that the next leg of the bull market is now underway, but it will provide some fundamental support at the current price level.