Oil Prices Hold Steady Ahead of Key US Jobs Report
Oil prices remained steady in Asian trading on Friday as investors cautiously awaited crucial US employment data.
Brent crude futures rose by 13 cents to $72.82 per barrel, while US West Texas Intermediate (WTI) crude futures increased by 12 cents to $69.27.
Investors have been balancing a large withdrawal from US crude inventories and a delay in production hikes by OPEC+ with uncertainty surrounding the upcoming US jobs report. The report is expected to provide further insight into the Federal Reserve’s potential decision on interest rate adjustments later this month.
Market strategist Yeap Jun Rong of IG noted that investors remain cautious due to mixed US economic data.
“The lead-up to the crucial jobs report may limit some risk-taking,” said Jun Rong.
He added that concerns about US labor conditions turning unexpectedly negative were still fresh following a global market sell-off in early August.
For the week, both Brent and WTI crude have seen declines, with Brent on track for an 8% drop and WTI expected to fall by nearly 6%. Recent data from the US Energy Information Administration (EIA) indicated a significant inventory decline of 6.9 million barrels, but this has not fully offset earlier losses.
OPEC+ also announced a two-month delay in its planned production increase, a move that surprised some market participants. Originally, the group had intended to roll back production cuts starting in October, but this decision comes after prices hit a nine-month low. The delay, which could tighten inventories by up to 200,000 barrels per day in the final quarter of the year, is seen as an attempt to support prices amid weaker demand, particularly from China and India.
Analysts, including those at Citi, have expressed optimism that OPEC+ actions, combined with geopolitical factors, could provide price support, keeping Brent crude prices between $70 and $72 per barrel. However, there are still concerns about weakening demand for fuels globally, which could further pressure oil prices.
In addition, the market is watching developments in Libya, where a potential political agreement could end oil field shutdowns that have removed 700,000 barrels per day of crude from the market.
Reuters, the New York Times, and Oil Price contributed to this report.
