Crude oil futures for October settlement started the day with a downside tendency despite the tight ranged trading for now, where downbeat economic figures increased the bearish pressure with the bleak economic outlook.
The October contract opened today at $88.80 a barrel, recording the high of $89.21 and the low of $88.33 a barrel and currently hovering around $88.46 a barrel.
Slowing growth across major economies remains the main downside pressure on crude oil with weaker prospects for demand. The jobs data from the United States yesterday signaled weak expectations for the NFP this Friday while the manufacturing data from China to the U.S. are not cheerful.
China’s manufacturing performance was slower than expected, the euro area and UK’s sectors contracted, and the U.S. is expected to report the first contraction in two years.
The downbeat vibe is that the major leading sector that precede the economic softness and possible contraction is manufacturing, and with the already seen weakness in other sectors and the labor market investors returned bearish on the economic outlook.
We still expected the negative pressure to persist, especially as oil is still affected by the strong 5.3 million barrel build up in crude inventories last week and also markets’ anticipation to the jobs report this Friday.
More volatility is expected for the rest of the day with eyes on the data from the United States and focus on the weekly jobless claims and more importantly on the ISM Manufacturing for August.