By Nicole Jao
NEW YORK (Reuters) – Oil prices fell 2% lower on Friday, with a big weekly loss after data. US jobs data was weaker than expected in August, outweighing price support from a slowdown in supply increases from OPEC+ producers.
futures fell $1.63, or 2.24%, to $71.06 a barrel, the lowest level since December 2021. US West Texas Intermediate crude oil futures fell $1.48, or 2.14%, to $67, 67, the lowest level since June 2023.
This week Brent fell 10%, while WTI fell around 8%.
U.S. government data show that employment rose less than expected in August, but a drop in the unemployment rate to 4.2% indicated an orderly slowdown in the labor market that may not warrant a major interest rate cut by the Federal Reserve this month.
“The jobs report was a bit weak and implied that the US economy is in decline,” said Bob Yawger, executive director of Energy Futures at Mizuho.
Concerns about Chinese demand also continued to put pressure on oil prices, Yawger said.
On Thursday, Brent fell to the lowest level since June 2023, despite a drawdown in US oil supplies and a decision by OPEC+ to postpone planned oil production increases.
Stocks fell 6.9 million barrels to 418.3 million barrels last week, compared with an expected drop of 993,000 barrels in a Reuters poll of analysts.
Signals that Libya’s rival sides could be moving closer to an agreement to end the dispute that has halted the country’s crude exports have also put pressure on oil prices this week. Exports remained largely closed, but some cargoes were allowed from storage.
Bank of America cut its Brent price forecast for the second half of 2024 to $75 a barrel from almost $90 previously, citing the build-up of global inventories, weaker demand growth and spare OPEC+ production capacity.
The number of active U.S. drilling rigs, an early indicator of future production, was unchanged this week at 483, energy services company Baker Hughes said Friday.
Money managers cut their net long crude oil futures and options positions in the week to September 3, the US Commodity Futures Trading Commission (CFTC) said on Friday.
