Monday's Market Minute: Keep an Eye On Crude Products Today

Crude oil products are trading higher this morning ahead of the cash open for U.S. stocks. The move up is on increased tensions in the Persian Gulf – on Friday, both /BZ and /CL broke a multi-day decline that had the WTI lower by 7% on the week.

Today, the U.K. will meet to discuss how to move forward and how to resolve the situation involving one of their tankers that’s been seized by Iranian forces. The aggressive actions on behalf of Iran is just the latest in an ongoing series of confrontations near the Strait of Hormuz, where last week, the U.S. shot down an Iranian drone. Surprisingly, the recent activity has had little impact on energy price prior to the end of last week. Crude’s limited reaction to the increased tensions have many looking to China’s demand concerns as the main force behind the recent price decay, as ongoing trade talks have stalled.

Further pointing to China demand concerns, last week the EIA reported the fifth weekly decline in crude inventories, and even that was unable to excite the bulls.

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