US Open – Claims better again and OPEC increases production

USOil, H1

Initial claims bounced 28k to a lean 222k in the final week of the month, hence trimming last week’s -76k plunge to a 52-year low of 194k (was 199k), while continuing claims fell -107k to a 1.956m new cycle-low, after a -46k drop to 2.063m (was 2.049m) prior cycle-low. The insured jobless rate fell to a 1.4% new cycle-low from a 1.5% prior low, versus a pre-pandemic 1.2% reading in March of 2020, and a 1.1% all-time low in April of 2019. Initial claims are averaging 238k in November, versus 285k in October and 341k in September. The 270k BLS survey week reading undershot recent survey week readings of 291k in October and 351k in September. Continuing claims fell -176k between the October and November BLS survey weeks, after drops of -572k in October, -97k in September, and -388k in August. Claims have tightened dramatically since September, though gyrations over the last two weeks have also reflected holiday volatility, which usually starts with the Veteran’s Day holiday and extends through the MLK week.

USOil was smashed down to three-plus month lows of $62.48, down from $65.92 at the open, and $67.15 overnight highs. Earlier headlines indicated OPEC+ ended its meeting with no decision made to increase production, though recent Bloomberg headlines said Russia proposes increasing output by the previously agreed 400k bpd. The front-month contract has since recovered to $64.00. A move under the August 23 low of $61.74 would take prices to levels last seen in May.

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Stuart Cowell  

Head Market Analyst

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