Global equity markets declined strongly over the last 24 hours as shown in the EMI Global Equity Index table below. After starting the week in positive territory the Index is now lower by 1.4% for the week resulting in the year to date gain narrowing to 7.6%. There are now only three bourses showing double digit gains for the year as China is still the only bourse in negative territory for the year. Over the last 24 hours the economic growth headwinds dominated global equity trading.
The API report was outside of the range of expectations. The crude oil build was lower than expected as was the gasoline build while distillate fuel showed an inventory draw versus an expectation for a small build. The API reported a build (of about 0.3 million barrels) in crude oil stocks versus an industry expectation for a larger build as crude oil imports decreased strongly while refinery run rates also decreased modestly by 0.9%. The API reported a surprise draw in distillate stocks. They also reported a smaller than expected build in gasoline stocks.
The report is mixed and mostly biased to the neutral side for everything other than distillate which is marginally bullish. The market is mostly lower heading into the US trading session and ahead of the EIA oil inventory report at 10:30 AM today. The market is always cautious on trading on the API report and prefers to wait for the more widely watched EIA report due out this morning. The API reported a build of about 0.3 million barrels of crude oil with Cushing, Ok about unchanged while PADD 2 stocks increased by 0.5 million barrel which is bullish for the Brent/WTI spread. On the week gasoline stocks increased by about 0.1 million barrels while distillate fuel stocks decreased by about 0.5 million barrels.