Crude Slides on Soft PMIs, Inventory Surplus
It’s been a rough week for U.S. crude, which has plunged 6.2%, the sharpest drop since mid-July. On Thursday, crude fell to 51.06, its lowest level since early August. Soft PMIs and a surplus in crude inventories have sent crude prices lower.
The September PMI reports, which were released this week, pointed to weakness in the manufacturing and services sectors. The Manufacturing PMI dropped below the 50-level for a fourth consecutive month, indicating ongoing contraction. The services sector has been stronger than manufacturing, but expansion slowed in September and was weaker than expected. Employment numbers have also softened this week. On Wednesday, ADP nonfarm payrolls for August dropped sharply to 135 thousand, compared to 195 thousand a month earlier. This was followed by jobless claims, which climbed to 219 thousand, up from 213 thousand a week earlier. Later on Friday, we’ll get a look at the official nonfarm payroll report. Will it follow in the path of the ADP release and soften in August? Wage growth, another key indicator, is expected to tick lower to 0.3%, after a reading of 0.4% in the previous release. If these key employment numbers are soft, nervous investors could snap up silver and send prices higher.