US PMI Manufacturing rose to 53.5 in September, up from 53.1, hitting a 20-month high. However, PMI services dropped slightly to 54.6, down form 55.0. PMI Composite also dropped slightly to 54.4, down from 54.6.
Chris Williamson, Chief Business Economist at IHS Markit, said:
“US businesses reported a solid end to the third quarter, with demand growing at a steepening rate to fuel a further recovery of output and employment.
“The survey data therefore add to signs that the economy will have enjoyed a solid rebound in the third quarter after the second quarter slump.
“The question now turns to whether the economy’s strong performance can be sustained into the fourth quarter. Covid-19 infection rates remain a major concern and social distancing measures continue to act as a dampener on the overall pace of expansion, notably in consumer-facing services. Uncertainty regarding the presidential election has also intensified, cooling business optimism about the year ahead. Risks therefore seem tilted to the downside for the coming months, as businesses await clarity with respect to both the path of the pandemic and the election.”
US oil inventories dropped -1.6m barrels, WTI extending sideway consolidation
US commercial crude oil inventories dropped -1.6m barrels in the week ending September 18. At 494.4m barrels, inventories are about 13% above the five year average for this time of the year. Gasoline inventories dropped -4.0m barrels. Distillate dropped -3.4m barrels. Propane/propylene inventories rose 1.7m barrels. Commercial petroleum inventories dropped -7.5m barrels.
WTI trades mildly higher after the release. The rebound form 35.98 lost momentum and pull back after hitting 41.43. But retreat was then contained at 38.66. Overall, it’s staying in a consolidation pattern below 43.50 medium term top, gyrating around a flat 55 day EMA. More sideway trading would be seen and the path could be quite unpredictable. But in any case, we’re not expecting a break of 43.50 for the near term. In case of another fall, downside should be contained by 34.36 support to bring rebound.