Oil prices edged down on Friday (Jun 7) and posted a third straight weekly loss as investors weighed Opec+ reassurances against the latest US jobs data that lowered expectations that the Federal Reserve will cut interest rates soon.
Brent crude futures settled US$0.25 lower at US$79.62 a barrel, while US West Texas Intermediate crude (WTI) fell US$0.02 to US$75.53.
Data showed US jobs growth accelerated far more than expected in May, keeping the Fed on track to hold off starting to cut interest rates until September at the earliest.
The European Central Bank went ahead with its first interest rate cut since 2019 on Thursday, despite an increasingly uncertain inflation outlook.
High borrowing costs can slow economic activity and dampen demand for oil.
“The jobs report indicated higher rates for longer,” said Andrew Lipow, president of Lipow Oil Associates. “That tends to dampen enthusiasm on the oil market.”
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The dollar rallied 0.8 per cent to a more than one-week high shortly after the release of the jobs report.
However, oil prices have been buttressed by support from Opec+ members Saudi Arabia and Russia, indicating readiness to pause or reverse oil output increases.
Still, crude fell for a third straight week on demand concerns, with Brent down 2.5 per cent and WTI off 1.9 per cent.
Oil slipped earlier this week after analysts saw Sunday’s Opec+ meeting as an indication of rising supply, which is bearish for prices. The US active oil rig count, an early indicator of future output, fell by four this week to 492, the lowest since January 2022, energy services firm Baker Hughes said.
Meanwhile, in China, data showed that although exports grew for a second month in May, crude oil imports fell, signalling demand concerns in the world’s largest crude oil buyer.
“Exports handsomely beat expectations,” said Tamas Varga of oil broker PVM. “But worryingly for oil, overall imports were again down.”
In Russia, the operations of the Novoshakhtinsk oil refinery in southern Rostov region suffered significant disruptions after a fire following a drone attack on Thursday.
Money managers cut their net long US crude futures and options positions in the week to Jun 4, the US Commodity Futures Trading Commission said. REUTERS
