SHANGHAI, Nov. 2 (SMM) – Base metals prices are expected to fall further. Crude oil prices rose 6.9% in the latter half of last week, thanks to decreased rig count in the US. However, crude oil will remain in oversupply as OPEC countries will not cut output.

Sluggish economy in China and bullish US dollar will compound to weigh on base metals. China’s official PMI in October was 49.8, flat at September’s. Raw material inventory index, import index and purchasing price index dropped across the board. Finished product inventory index increased, meaning company by and large worked through inventories. Weak demand in China also led to heavy stock backlogs.

US non-farm payrolls are expected to add 180,000 in October, with unemployment rate expected to stabilize at 5.1%. Salaries will increase 0.3% per hour in October, with annualized growth of 2.3%. Inflation rate will fall short of target.

Annualized US PCE goods price index excluding food and energy prices rose 1.3% in September, falling short of the 1.4% expected, but level with August’s. Inflation rate remained below the 2% target for the fortieth month.