The FOMC meeting held on 29th and 30th of October this year made a decision to halt back the curtailing of the stimulus program i.e. QE program. The Fed with the unsupportive data on the US economy is likely to postpone the decision till the March of the next year. Looking at the US economy, according to the Commerce Department, it expanded at 2.8% annualized rate last quarter greater than the second quarter growth of 2.5%. Also, the unemployment claims data on 7th November shows that the claims had reduced from the previous period of 340,000 to 336,000. The ISM non-manufacturing index rose by 1% greater than the September’s readings of 54.4% to 55.4%. Similarly, the Non-Manufacturing Business Index rose to 59.7%, i.e. 4.6% higher than the September data of 55.1%. Besides these, the New Orders Index fell by 2.8% to 56.8% though the Employment Index increased 3.5% to 56.2%. The next index i.e. the Price Index reached to 56.1% with a decrease by 1.1% showing a slower growth in the prices compared to the September prices. Though it does not show a significant improvement, but seems satisfactory towards positive growth.

The oil futures advanced as much as 0.5% in the New York. The West Texas Intermediate (WTI) fell down by 0.6 % yesterday on the concern regarding the slight improvement in the US economic condition. The improvement does too support the Fed to implement the scaling back of the stimulus program. The WTI for December delivery advanced 0.46% in the NYMEX. Similarly, the Brent for December settlement traded o.15% lower on the London-based ICE Futures Europe Exchange. The spread between the Brent and WTI was smaller since October 25.

As US has a strategic reserve capacity of 727 million barrels; according to the EIA, the daily US crude output climbed to 7.9 million barrels as it had increased to 385.4 million last week. The US alone accounts for about 21% of the global oil demand double the consumption from China and with the over flowing of the oil in the market, the OPEC is likely to cut the oil supply. OPEC member countries alone pump 40% of the world’s crude. This has been due to the oil production from the shale in the North American region.

With the drop down of the Euro against the USD due to the ECB’s unexpectedly cutting its benchmark rate to a record low made the Brent crude prices to fall. Also the stronger and positive growth of the US economy supported the drop in both the Euro and the crude prices.