NEW YORK — Oil prices fell slightly on Friday, marking their third consecutive weekly loss as investors weighed the impact of OPEC+ assurances against robust U.S. employment data, which diminished expectations of an imminent Federal Reserve interest rate cut.
Brent crude futures closed 25 cents lower at $79.62 per barrel, while U.S. West Texas Intermediate (WTI) crude slipped 2 cents to $75.53 per barrel.
The latest U.S. jobs report revealed an acceleration in job growth for May, surpassing forecasts and suggesting that the Federal Reserve is likely to delay any interest rate cuts until at least September.
On Thursday, the European Central Bank implemented its first interest rate reduction since 2019, despite an increasingly uncertain inflation outlook. Elevated borrowing costs can slow economic activity and reduce oil demand.
“The jobs report suggests that higher interest rates will persist for a longer period,” commented Andrew Lipow, president of Lipow Oil Associates. “This tends to dampen enthusiasm in the oil market.”
Following the jobs report, the U.S. dollar strengthened by 0.8%, reaching its highest level in over a week.
Despite this, oil prices found some support from OPEC+ members Saudi Arabia and Russia, who signaled a readiness to pause or potentially reverse their plans to increase oil production. Nevertheless, concerns about demand led to a third consecutive week of declines, with Brent crude down 2.5% and WTI down 1.9%.
Earlier in the week, oil prices fell after analysts interpreted Sunday’s OPEC+ meeting as a sign of increasing supply, which generally exerts downward pressure on prices.
The U.S. active oil rig count, an early indicator of future production, decreased by four this week to 492, its lowest level since January 2022, according to energy services firm Baker Hughes.
In China, although exports grew for the second consecutive month in May, crude oil imports declined, raising concerns about demand from the world’s largest crude oil buyer.
“Exports significantly exceeded expectations,” noted Tamas Varga of oil broker PVM. “However, the continued decline in overall imports is troubling for the oil market.”
In Russia, the Novoshakhtinsk oil refinery in the southern Rostov region experienced substantial disruptions following a fire caused by a drone attack on Thursday.
Additionally, money managers reduced their net long positions in U.S. crude futures and options in the week leading up to June 4, as reported by the U.S. Commodity Futures Trading Commission (CFTC).
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