US Crude Futures Slip Beneath $50

Data from the US Energy Information Administration late on Wednesday showed that US crude exports soared to 1.98 million barrels per day last week, much higher than the 1.50 million bpd reported just a week prior. The increase in exports has been triggered by the large discount in prices for West Texas Intermediate crude compared to Brent crude, which makes oil exports from the country increasingly attractive. US crude futures for November delivery fell for a third session on Wednesday. Prices stabilized in early Asian trade on expectations that top producers Saudi Arabia and Russia would work to extend output cuts during November OPEC and non-OPEC discussions. US crude futures are currently hovering around $49.90 a barrel. Considering the bearish short-term trend, a break below the strong support at $49.50 could spur a fresh bout of selling pressure.

The Markit monthly UK services PMI rose to 53.6 in September, slightly better than economists’ forecast and easily topping the 50-mark that separates expansion from contraction. The robust figures for the sector that accounts for roughly 80.00% of the British economy should come as a relief for investors after both manufacturing and construction surveys disappointed earlier in the week. The PMI surveys are considered useful leading indicators of economic activity, especially because they reflect purchasing managers’ future expectations. However, the one soft spot that emerged was new business growth which tumbled to its lowest level in over a year.  Many clients withheld new investment decisions because of the uncertainty surrounding Brexit and the troubling outlook associated with an exit. GBPJPY is currently perched just above the key support at 149.000, with any breach of that zone potentially unlocking further downside in the pair.