Oil Stabilises Before US Jobs Report
OIL & GAS

Oil Stabilises Before US Jobs Report

Oil prices maintained stability as investors awaited US employment data. Despite this, the commodity was set for a weekly loss, even with OPEC+ producers delaying supply increases.

By 0958 GMT, Brent crude futures had increased by 37 cents, or 0.51 per cent, reaching $73.06 per barrel. U.S. West Texas Intermediate (WTI) crude futures were up by 33 cents, or 0.48 per cent, standing at $69.48.

For the week, Brent was anticipated to record a decline of over 7 per cent, while WTI was on track for a drop of nearly 6 per cent.

US non-farm payrolls data was scheduled for release at 1230 GMT. Given the mixed signals regarding the US economy over the past week, this jobs data was expected to be crucial in determining the extent of any interest rate cut at the Federal Reserve?s upcoming policy meeting on September 17-18.

US service sector activity remained steady in August; however, private job growth had slowed, aligning with a cooling labour market. IG market strategist Yeap Jun Rong mentioned that memories of the early-August market sell-off had kept investors cautious about potential negative surprises from US labour conditions.

Brent settled at its lowest level since June 2023. Concerns about US and Chinese demand countered support from a significant withdrawal from US oil inventories and OPEC+?s decision to delay planned output increases.

Crude stockpiles had decreased by 6.9 million barrels to 418.3 million barrels, compared to an anticipated drop of 993,000 barrels as per a Reuters analyst poll.

PVM analyst Tamas Varga noted that concerns about Chinese and US economic conditions, the diminishing influence of the OPEC+ producer group on the oil market, and its ample spare capacity suggested that further weakness in oil prices was possible, with limited upside potential compared to a month ago.

Additionally, indications that Libya?s rival factions might be nearing an agreement to end the dispute affecting the country?s oil exports also weighed on oil prices this week. Although exports remained largely halted, some loadings were permitted from storage.

Bank of America reduced its Brent price forecast for the second half of 2024 to $75 per barrel from nearly $90, citing increasing global inventories, weaker demand growth, and OPEC+?s spare production capacity in a note released.

Oil prices maintained stability as investors awaited US employment data. Despite this, the commodity was set for a weekly loss, even with OPEC+ producers delaying supply increases. By 0958 GMT, Brent crude futures had increased by 37 cents, or 0.51 per cent, reaching $73.06 per barrel. U.S. West Texas Intermediate (WTI) crude futures were up by 33 cents, or 0.48 per cent, standing at $69.48. For the week, Brent was anticipated to record a decline of over 7 per cent, while WTI was on track for a drop of nearly 6 per cent. US non-farm payrolls data was scheduled for release at 1230 GMT. Given the mixed signals regarding the US economy over the past week, this jobs data was expected to be crucial in determining the extent of any interest rate cut at the Federal Reserve?s upcoming policy meeting on September 17-18. US service sector activity remained steady in August; however, private job growth had slowed, aligning with a cooling labour market. IG market strategist Yeap Jun Rong mentioned that memories of the early-August market sell-off had kept investors cautious about potential negative surprises from US labour conditions. Brent settled at its lowest level since June 2023. Concerns about US and Chinese demand countered support from a significant withdrawal from US oil inventories and OPEC+?s decision to delay planned output increases. Crude stockpiles had decreased by 6.9 million barrels to 418.3 million barrels, compared to an anticipated drop of 993,000 barrels as per a Reuters analyst poll. PVM analyst Tamas Varga noted that concerns about Chinese and US economic conditions, the diminishing influence of the OPEC+ producer group on the oil market, and its ample spare capacity suggested that further weakness in oil prices was possible, with limited upside potential compared to a month ago. Additionally, indications that Libya?s rival factions might be nearing an agreement to end the dispute affecting the country?s oil exports also weighed on oil prices this week. Although exports remained largely halted, some loadings were permitted from storage. Bank of America reduced its Brent price forecast for the second half of 2024 to $75 per barrel from nearly $90, citing increasing global inventories, weaker demand growth, and OPEC+?s spare production capacity in a note released.

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