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Low oil prices are weighing on output

Published Wednesday, October 28th, 2015

The prevailing cautionary tone saw global stock indices extend loses for a second consecutive day as investors kept their power dry ahead of a slew of important economic reports. A busy latter half of this week will see the Fed announce its latest policy decision, a first estimate of 3Q US GDP and the prospect of further stimulus from the Bank of Japan when it meets on Friday. Although Janet Yellen is virtually guaranteed to leave rates at historic lows, their monthly meeting got under way amid another soft batch of US economic data.

In what was a worrying sign of weak business spending, orders for durable goods shrank by 1.2% in September and the figure for August was revised to show a sharper decline of 2.9%. Adding to the downbeat mood was a reading US consumer morale which dipped to a four-month low in October after a survey from the Conference Board fell well short of expectations. Meanwhile, uncertainty surrounding the outcome of a vote on a tentative US budget deal will likely further cap any risk asset gains.

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Posted by Tamas Varga

Tamas Varga has been in the oil industry since 1992 and with PVM for 18 years. During his time in the industry he has gathered a range of experience in the oil markets. At PVM Tamas is in charge of data collection and analysis.