Oil prices fell nearly 2% on Friday, posting weekly losses after U.S. employment data diminished the prospect of an imminent interest rate cut that could dampen demand for crude oil in the world’s largest economy.
Brent crude futures settled at $77.33 per barrel, losing $1.37, or 1.7%. WTI crude oil futures fell $1.54, or 2%, to $72.28 a barrel.
Both indicators finished the week with a loss of approximately 7%.
High-interest rates, which slow down economic growth and oil demand in major economies such as the USA and the Eurozone, seem to be permanent in the near term.
Friday’s data showed that U.S. employers added many more jobs than expected in January, making the Fed less likely to cut interest rates in the near term. As a result, the dollar gained value against all major currencies.
Prices had changed little before the report, but the huge increase in jobs created had paved the way for a rate cut.
Power was restored at noon Friday at the Whiting refinery, which disrupted operations Thursday. However, sources said BP has not yet set a date to restart the plant.
Baker Hughes said the US oil rig count, an early indicator of future supply, remained steady at 499 this week.
The U.S. Commodity Futures Trading Commission said money managers increased their combined futures and options oil positions in New York and London by 18,082 contracts to 117,226 in the week to Jan. 30.
Across the Atlantic, a policymaker at the European Central Bank also suggested it was too early to cut interest rates in the eurozone.
Concerns about China’s economic recovery remained, with the International Monetary Fund predicting that the country’s economic growth would slow to 4.6% in 2024 and fall further in the medium term to around 3.5% in 2028.
The weekly slide in oil prices was already in motion after false reports of a ceasefire between Israel and Hamas caused prices to fall more than 2% on Thursday.
A pause in the conflict could ease the political risk looming over Gulf and Red Sea shipping lanes that are key to global energy flows.
Sources on Thursday said allies led by the Organization of Petroleum Exporting Countries and Russia have not changed production policy. It is said that OPEC+ will decide in March whether the voluntary oil production cuts implemented in the first quarter will be extended. The group will cut production by 2.2 million barrels per day for the first quarter, as announced in November.