US crude is unchanged in the Tuesday session, following sharp losses on Monday. In North American trade, WTI/USD futures are trading at $46.79 per barrel. Brent futures are trading at $48.73, as the Brent premium stands at $1.88. On the release front, ISM Manufacturing PMI came in at 51.9 points, edging above the forecast of 51.8 points. On Wednesday, the Federal Reserve concludes its monthly policy meeting and is expected to maintain the benchmark interest rate at 0.25 percent. As well, the US releases ADP Employment Change, which precedes the official Nonfarm Employment change report on Friday.
The week started out with oil dropping sharply, as internal squabbles within OPEC have cast doubt on the cartel’s ability to reach an agreement to cap production. US crude dropped 3.1 percent on Monday, as OPEC members met on Friday but failed to make any headway towards an agreement. “There was a lot of talk and nobody managed to agree on anything. That has been pushing the market down,” said Jeffrey Halley, senior market analyst at OANDA in Singapore. OPEC has invited Russia and other exporters to join the OPEC initiative, but non-OPEC countries have made no commitments so far. Previous attempts by OPEC to set limits on each member have failed, so it’s questionable if the cartel will have more success this time around. OPEC will meet in Vienna on November 30 in the hopes of hammering out an agreement, so traders can expect volatility in oil prices in the coming weeks.
In the US, there was positive news from the consumer front on Monday, as Personal Spending rebounded with a 0.5% gain in September, after a flat reading of 0.0% in August. Gold responded to the reading with slight losses. This release comes on the heels of a disappointing consumer spending report on Friday, as UoM Consumer Sentiment fell to 87.2 points in October, below expectations and dropping to its lowest level since August 2015. The Fed will also hold a policy meeting on Wednesday, but the markets aren’t expecting a rate move so close to the US presidential election. The rate statement will be carefully monitored, as analysts comb for hints about the extent of support among FOMC members ahead of the crucial December meeting.
Tuesday (November 1)
- 9:45 US Final Manufacturing PMI. Estimate 53.3. Actual 53.4
- 10:00 US ISM Manufacturing PMI. Estimate 51.8. Actual 51.9
- 10:00 US Construction Spending. Estimate 0.5%. Actual -0.4%
- 10:00 US IBD/TIPP Economic Optimism. Estimate 48.7. Actual 51.4
- 10:00 US ISM Manufacturing Prices. Estimate 54.0. Actual 54.5
- All Day – US Total Vehicle Sales. Estimate 17.5M
Wednesday (November 2)
- 8:15 US ADP Nonfarm Employment Change. Actual 166K
- 14:00 FOMC Statement
- 14:00 Federal Funds Rate. Estimate <0.50%. Actual <0.50%
*All release times are EDT
*Key events are in bold
WTI/USD for Tuesday, November 1, 2016
WTI/USD November 1 at 12:25 EDT
Open: 46.79 High: 47.37 Low: 46.56 Close: 46.85
WTI USD Technical
WTI/USD was flat in the Asian and European sessions. The pair has posted sharp losses in the North American session
- 46.69 is providing weak support. This line could break in the North American session
- There is resistance at 50.13
Further levels in both directions:
- Below: 46.69, 43.45 and 38.38
- Above: 50.13, 53.50, 59.69 and 65.49
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