Daily Market Color September 8, 2016Oil Prices Soar as U.S Crude Stock Experiences Largest Drop in 17 Years Oil prices surged more than 4% today following the EIA report that showed U.S. crude inventories decreased by 14.5 million barrels last week, the largest drawdown since 1999. The reported figure was significantly below market expectations of a half million barrel gain, with part of the fall attributed to Tropical Storm Hermine’s presence in the Gulf Coast producing region. Other U.S. economic data released today included initial jobless claims, stated at 259k and below estimates of 265k. The level marks the lowest it has been in seven weeks as statistics continue to pour in supporting a healthy labor market. The data spurred a slide in bond prices, with the yield on the 10-year Treasury increasing more than 7bp to 1.61%. Internationally, the European Central Bank met today and left interest rates unchanged as expected. Following the meeting, ECB President Mario Draghi provided vague details regarding the future of the asset-purchasing program. Due to end in March 2017, current ECB purchases total 1.74 trillion euros worth of bonds, holding deposit rates negative and encouraging banks to give out loans. Draghi stated that extending the program was not discussed at the meeting, but ensured that the central bank would research the options available for future quantitative easing. The dovish comments pushed the euro to a two-week high of $1.1326 per euro while equities in the region closed down on the day. All three major U.S. stock indexes are trading down nearly 0.4% on the day, while Treasury yields and swap rates are up 4-9 bps across the curve. The 4% rise in oil prices has pushed WTI Crude Oil to $47.60/barrel and Brent Crude to almost $50/barrel.