Oil Futures Steady, Markets Watch Eurozone PMIs, Infections
WASHINGTON, D.C. (DTN) -- In early trade Friday, oil and refined product
futures and Brent crude on the Intercontinental Exchange bumped higher,
although all contracts are on track for modest weekly declines as investors
gauge the state of global oil demand through overnight economic data out of
Eurozone showing steepening contraction in its services sectors hit by
resurgent coronavirus infections and renewed quarantine restrictions.
The so called "second wave of coronavirus infections" across the 19-nation
economic bloc have begun impacting its business activity, with
non-manufacturing Purchasing Managers Index for early October falling to 46.2
-- meaning deteriorating conditions. The reading of 50 separates contraction
from expansion in the business cycle. Manufacturing activity, however, held
higher for the reviewed period at 32-month high 54.4 reading, with German
manufacturers reporting robust growth of 58.
Consumer confidence across the European Union took a hard beating from the
resurgent virus, falling to a negative 15.5 in early October, with consumers
seen pulling back on spending and driving. Traffic activity across the European
Union fell sharply in the most recent four weeks, with some of the hardest hit
countries, including Italy and the United Kingdom reporting their traffic
volumes dropped below the Jan. 13 baseline, according to the data collected by
Domestically, the new coronavirus cases are now back to their mid-July highs
at 75,049 cases reported on Thursday, with quarantine restrictions seen
tightening across some major cities.
The second wave of infections could derail the nascent recovery of the
domestic labor market that has recovered more than half of the 22 million jobs
lost back in March-April. U.S. Labor Department reported initial unemployment
claims dropped last week to the lowest level since the pandemic began eight
months ago. Claims from the prior two weeks were also revised lower, likely
reflecting new data from California that paused processing first-time claims in
mid-September to address fraud.
In early morning trade, the December West Texas Intermediate futures traded
little changed at $40.75 bbl and December Brent crude on ICE added 19cts to
$42.65 bbl. NYMEX ULSD November futures firmed to $1.1650 gallon and the
front-month RBOB contract softened to $1.1575 gallon.
Liubov Georges, 1.646.359.4088, firstname.lastname@example.org, http://www.dtn.com
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