US employment rose less than expected in August. Oil prices settled 2% lower on Friday. A major weekly loss took place after the data US jobs data was weaker than expected in August, undercutting price support from delayed supply increases by OPEC+ producers.
Brent crude futures fell $1.63, or 2.24%, to $71.06 a barrel, their weakest since December 2021. WTI Crude futures fell $1.48, or 2.14%, to $67.67, their weakest since June 2023.
Brent fell 10% for the week, while WTI fell nearly 8%.
U.S. government data showed employment rose less than expected in August, but the 4.2% drop in the unemployment rate points to an orderly labor market slowdown that may not warrant a major rate cut from the Fed this month.
The jobs report was slightly softer, suggesting the U.S. economy is in decline. Concerns about Chinese demand also continued to weigh on oil prices.
On Thursday, Brent was at its lowest level since June 2023, despite a drawdown of U.S. oil inventories and a decision by OPEC+ to delay planned oil production increases.
Compared to a 993,000-barrel drop forecast by a survey of analysts the U.S. crude inventories fell by 6.9 million barrels last week to 418.3 million barrels.
Signals that Libya’s rival factions may be closer to a deal to end a dispute that has halted the country’s crude exports also weighed on oil prices this week. Exports remain mostly closed, but some loading from storage is permitted.
Citing rising global inventories, weak demand growth, and OPEC+ spare production capacity, Bank of America lowered its Brent price forecast for the second half of 2024 to $75 a barrel from around $90 a barrel in a note on Friday.
Baker Hughes reported that the active U.S. oil rig count, an early indicator of future production, remained steady at 483 this week.
The U.S. Commodity Futures Trading Commission (CFTC) said on Friday that money managers reduced their net long U.S. crude futures and options positions in the week to Sept. 3.
