Oil futures jumped in Asian trading on Monday as a possible hurricane system approached the U.S. Gulf Coast and markets shook off a sell-off after weaker-than-expected U.S. jobs data on Friday.
Brent crude futures rose 71 cents, or 1%, to $71.77 a barrel by 0635 GMT. WTI oil futures rose 72 cents, or 1.06%, to $68.39 a barrel.
Prices rose as high as $1 in early Asian trading before retreating. The jump was partly due to a response to a possible hurricane in the U.S. Gulf Coast.
A weather system in the southwestern Gulf of Mexico is forecast to develop into a hurricane before it reaches the northwestern U.S. Gulf Coast, a statement said on Sunday. The U.S. Gulf Coast accounts for about 60% of U.S. refining capacity.
Expectations have recovered somewhat after last week’s sell-off.
At the close on Friday, Brent fell 10% to its lowest level since December 2021, while WTI fell 8% to its lowest close since June 2023 on weak U.S. employment data.
The much-anticipated U.S. government employment report showed nonfarm payrolls rose by 142,000 in August, less than market watchers had expected, and the July figure was revised downward to 89,000, the smallest increase since the deficit reduction in December 2020.
Analysts said the drop in the unemployment rate was partly due to the Fed cutting interest rates this month by just 25 basis points rather than a half-point cut.
Lower interest rates generally boost demand for oil by spurring economic growth and making oil cheaper for holders of non-dollar currencies.
However weak demand continued to limit price gains.
The weakness in China likely stems from an economic slowdown and inventory destocking.
Refining margins in Asia fell to their lowest seasonal levels since 2020 due to weak demand from the two major economies. Fuel oil exports to the U.S. Gulf Coast fell to their lowest level since January 2019 last month due to weak refining margins.
