Oil steadies following August jobs report
2024.09.06 12:26
Investing.com — Oil prices were higher as investors poured through the nonfarm payrolls report and considered both a large withdrawal from US crude inventories and a planned output delay from OPEC+ producers.
At 09:08 ET (13:08 GMT), the contract added 0.7% to $73.16 per barrel, while futures (WTI) traded up by 0.6% at $69.58 a barrel. Both contracts were on pace to post declines for the week.
The US economy added fewer jobs than anticipated in August, but rose from a sharply revised July figure, according to Labor Department data that could factor into the Federal Reserve’s next policy decisions.
Nonfarm payrolls came in at 142,000 last month, up from a downwardly-revised mark of 89,000 in July. Economists had called for a reading of 164,000, up from the initial July mark of 114,000.
Friday’s release also showed the US unemployment rate at 4.2%, compared to July’s figure of 4.3%. The level was in line with estimates.
On a monthly basis, average hourly earnings growth also ticked up to 0.4% after contracting by 0.1% in July.
Following the release, bets that the Fed will introduce a deeper 50 basis-point rate cut — rather than a shallower 25 basis-point reduction — increased. The prospect of lower interest rates is typically supportive of crude prices, as a dip in borrowing costs can theoretically help boost economic activity and the broader oil demand.
Elsewhere, crude stockpiles dipped by 6.9 million barrels to 418.3 million barrels during the week ended on Aug. 30, according to the US Energy Information Administration on Thursday. Analysts had forecast a draw of 1 million barrels, Reuters reported.
The OPEC+ group of producers, meanwhile, said it had agreed to postpone a planned increase in oil production for October and November.
Despite support from these developments, Brent settled at an over one-year low on Thursday due in part to persistent fears over demand in the US and China.
