Oil Market Expected to be Worse Because of Dropping in US Stock and Oil

WikiFX News (7 Sept) - the US stock index and yields have reported to bounce off recently after the release of the US non-farm payrolls report, or NFP, in August, with the index rising to an intraday high level of 93.24, hitting a week high; WIT crude oil falling to an intraday low level of 39.35 dollars, recording a month low.

The NFP in August showed that jobs increased by 1.371 million and unemployment rate decreased by 8.4%. Although it revealed an optimistic market, the working population, objectively speaking, presents a sign of slowdown. In addition, the permanent unemployment rose to 3.4 million. Therefore, there are great uncertainties about the recovery in the US economy.

According to the performance of US stock on Sept. 4th, it is obvious that the US stock wasnt stronger for benefiting from the NFP and three benchmark indexes generally dropped. It is expected that the oil may encounter further the sustained selling pressure from the US stock.

This Saturday will see the interest rate decision in September by the European Central Bank (ECB). Considering the worse European coronavirus situation, the ECB warned last week that the euro depreciated fast. The more easing signals by the ECB may put pressure on the euro, strengthen the US stock index and drive further downside in the gold price.

Moreover, the adds are that the oil demand becomes worse during the upcoming seasonal shutdown maintenance of oil refineries. The oil price, so far, has fallen below the level of 40 dollars, and is expected to be confronted with selling pressure if it cannot break upward the level of 41.3 dollars in the near term.

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Three benchmark indexes chart