Oil fell more than 2% on Friday after data showed that employment in the United States increased less than expected in August and was on track for a significant weekly loss as demand concerns outweighed OPEC+ producers’ delay in increasing supply.
By 12:05 p.m., Brent crude futures were down $1.62, or 2.23 percent, to $71.07 a barrel. EDT or 1605 GMT U.S. Crude futures for West Texas Intermediate were down $1.52, or 2.2%, to $67.63.
Brent was expected to lose 10% for the week, while WTI was expected to lose around 8%. Friday’s employment data from the U.S. government showed that employment increased less than expected in August. However, a drop in the unemployment rate to 4.2% suggested that the orderly slowdown in the labor market continued and probably did not necessitate a significant reduction in the Federal Reserve’s interest rate this month.
Bob Yawger, Mizuho’s executive director of energy futures, stated, “The jobs report was a little soft and implied that the U.S. economy is on the slide.” Worries around Chinese interest likewise kept on forcing oil costs, Yawger said.
Despite OPEC+ delaying planned oil output increases and a withdrawal from U.S. oil inventories, Brent settled at its lowest price since June 2023 on Thursday. Last week, crude stockpiles in the United States decreased by 6.9 million barrels to 418.3 million barrels, compared to a 993,000 barrel decline that was predicted by an analyst poll conducted by Reuters.
Oil prices this week were also impacted by signs that Libya’s rival factions might be closer to reaching an agreement to end the dispute that has halted the country’s oil exports. Although some loadings from storage have been permitted, most exports remain closed.
In a note released on Friday, Bank of America stated that it had reduced its forecast for the second half of 2024’s Brent price to $75 from almost $90. The reason for this change was the expansion of global inventories, slower growth in demand, and spare production capacity from OPEC+.
