Oil prices fall on weak US growth figures

<p>US crude was down 45 cents at $45.89 (£30) a barrel at 07:40 GMT.</p>

Oil prices tumbled today (October 30th) after the release of fresh data showing that US economic growth had significantly slowed, fuelling concerns about the world's largest economy.

US crude was down 45 cents at $45.89 (£30) a barrel at 07:40 GMT, while Brent crude fell 32 cents to $48.48 a barrel.

The sluggish US growth figures come after the release of government data earlier in the week showing oil stockpiles last week had increased by 3.4 million barrels, which was below estimates, Reuters reports.

According to the Department of Commerce, US gross domestic product grew at an annualised pace of 1.5 per cent between July and September, down from 3.9 per cent in the second quarter.

It said the slowdown was partly due to companies running down stockpiles of goods in their warehouses. Consumer spending grew at 3.2 per cent in the third quarter, down from 3.6 per cent in Q2.

US growth could be strong in Q4

Analysts quoted by the BBC said that the running down of warehouse stockpiles in the third quarter was likely to be a temporary effect and they expected growth to accelerate again in the fourth quarter.

The Federal Reserve has decided to keep US interest rates unchanged at the end of its two-day meeting yesterday on Wednesday. However, officials have suggested that they had become less concerned in recent weeks about the slowing down of the economy overseas. 

They signalled that they will assess if it was time to raise rates at their next meeting, as the US economy was still expanding at a moderate pace. The new growth data could weigh in the balance for a 2016 interest rate hike, as opposed to a December one.

In September, the Fed left short-term rates unchanged amid worries about weak growth abroad, particularly in China. Job data revealed there were 142,000 new jobs in September, compared with more than 200,000 per month from May to July. A strong dollar continues to dampen demand for American exports.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.