Global equity markets have been drifting lower over the last twenty four hours as shown in the EMI Global Equity Index table below. The EMI Index shed about 0.23% narrowing the week to date gain to just 0.3% as well as narrowing the year to date gain to 7%. Not much has changed in the rankings of individual bourses as the equity markets have been in a relatively quiet trading pattern so far this week. The potential main market mover is not likely to come until the US nonfarm payroll data is released on Friday morning. For now global equities have been a neutral for the oil complex as well as the broader commodity complex.
The API report was mixed and marginally outside of the range of expectations. The crude oil build was lower than expected while both gasoline and distillate fuel showed small declines from inventory versus a projection for a small build. The API reported a build (of about 0.5 million barrels) in crude oil stocks versus an industry expectation for a larger build as crude oil imports decreased modestly while refinery run rates increased modestly by 1.2%. The API reported a small draw in distillate stocks. They also reported a marginal draw in gasoline stocks.
The API report is mixed and mostly biased to the neutral side for everything. 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 0.5 million barrels of crude oil with Cushing, Ok showing a small build of 0.1 million barrels while PADD 2 stocks increased by 0.6 million barrel which is bullish for the Brent/WTI spread. On the week gasoline stocks decreased by about 0.1 million barrels while distillate fuel stocks decreased by about 0.3 million barrels.
With the global economy and oil fundamentals becoming more the focus of the trading and investing community this week's oil inventory report could be a price catalyst especially if the actual outcome shows a large deviation from the projections. However, any inventory reaction is likely to be short lived as the main event for this week is still likely to be the markets focusing on the macroeconomics especially the US jobs report on Friday.