Worst U.S. Manufacturing Data in 10 Years Lowers Oil Prices

By: Pam Corn / October 1, 2019

Oil prices edged lower on Tuesday after a key U.S. manufacturing report dimmed the outlook on the manufacturing industry and invoked lingering fears of a global recession.

manufacturing

Brent crude futures declined $0.49 to $58.76/ barrel while WTI crude dropped $0.67 to $53.40/barrel. Both benchmarks posted their largest quarterly declines of the year.

Based on an overview from the Institute for Supply Management (ISM), U.S. manufacturing activity shrank in September to its lowest reading in more than a decade at 47.8%. The expectation was 50.1%. An indication below 50% signifies a contraction. This continues to draw more attention to the negative impact the U.S. – China trade war is having on the world’s largest economy. As a result, the broader market indices are down about 1% today, with the Dow Jones Industrial Average down about 300 points at writing.

“The PMIs across the globe have continued to deteriorate and obviously we are in line with that deterioration. It’s all due to the trade war,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

“Manufacturing itself is in a recession, but it does not mean that the overall economy is in a recession.”

The decreasing manufacturing data has a negative impact on oil prices since lower manufacturing output typically means less oil demand. Also steepening oil’s losses is the strong U.S. dollar index, last traded at 98.8. The dollar is trading at two and one-half year highs as traders flock to the dollar amidst the fears of recession and impacts of the U.S. and Chinese trade war.

 

https://www.reuters.com/article/us-global-oil/oil-prices-sink-as-weak-us-economic-data-dims-demand-outlook-idUSKBN1WG2JN

 

https://www.reuters.com/article/us-usa-stocks/wall-street-tumbles-as-september-factory-activity-hits-10-year-low-idUSKBN1WG3R1


Categories: Industry Update, Economic Impact, Supply Chain, World Oil Market


Pam Corn

Written by

Pam Corn

As Director of Marketing for Guttman Energy, I provide expertise within advertising strategies, digital marketing, and public relations to communicate our key messaging to our stakeholders. I offer diversified leadership, drive innovation and cutting-edge business, branding, to generate interest in Guttman service offerings.


Guttman Energy Daily Market Update Disclaimer – The information contained in this market update is derived from sources believed to be reliable; however this update could include technical inaccuracies or typographical errors and Guttman Energy does not guarantee the accuracy, completeness or reliability of this update. FURTHERMORE, THIS UPDATE IS PROVIDED "AS IS," WHERE IS, WITH ALL FAULTS AND WITHOUT ANY WARRANTY OR CONDITION OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY. GUTTMAN ENERGY ALSO SPECIFICALLY DISCLAIMS ALL EXPRESS AND IMPLIED WARRANTIES. YOU USE THIS UPDATE AT YOUR SOLE RISK. This update and any view or comment expressed herein are provided for informational purposes only and should not be interpreted in any way as recommendation or inducement to buy or sell products, commodity futures or options contracts.


Comments

Subscribe to our blog

Price Feed

Stay up-to-date on current fuel prices and market trends with our NYMEX price feed (15 minute delay to the live market).

© 2018 Market data provided and hosted by Barchart Market Data Solutions. Fundamental company data provided by Morningstar and Zacks Investment Research. Information is provided 'as-is' and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see disclaimer.

Categories

Contact Us