Oil prices dropped by 2 per cent, experiencing a significant weekly decline after US jobs data for August fell short of expectations, which overshadowed support for prices due to OPEC+ producers delaying supply increases.

Brent crude futures decreased by $1.63, or 2.24 per cent, reaching $71.06 per barrel, their lowest since December 2021. Meanwhile, US West Texas Intermediate (WTI) crude futures fell by $1.48, or 2.14 per cent, to $67.67, marking their lowest point since June 2023.

For the week, Brent recorded a 10 per cent decline, while WTI saw an 8 per cent drop.

According to US government data, employment growth in August was weaker than anticipated. However, the jobless rate fell to 4.2 per cent, indicating a gradual slowdown in the labour market, which may not prompt the Federal Reserve to implement a significant interest rate cut this month.

Bob Yawger, executive director of energy futures at Mizuho, noted that the jobs report suggested a softening economy in the US Yawger also mentioned that concerns over Chinese demand continued to weigh on oil prices.

Brent settled at its lowest point since June 2023, despite a drop in US oil inventories and OPEC+'s decision to delay planned increases in oil output.

US crude inventories declined by 6.9 million barrels, falling to 418.3 million barrels last week, compared to an expected drop of 993,000 barrels, as per a Reuters poll of analysts.

Additionally, signs of progress between Libya's rival factions toward resolving a dispute that has halted the country's crude exports added pressure to oil prices this week. While exports remained mostly halted, some loadings from storage were permitted.