2023-07-07 19:51:38
(New York) Oil prices climbed to their highest level in two months on Friday as the slight easing in the U.S. job market staved off fears that the U.S. central bank could overdo it on rate hikes at the point to stall the economy.
Posted yesterday at 3:51 p.m.
But lingering concerns about weakening demand are slowing its rise with announcements of supply cuts from Russia and Saudi Arabia.
A barrel of Brent North Sea oil for September delivery climbed 2.54% to $78.47.
Its US equivalent, a barrel of West Texas Intermediate (WTI) for August delivery, gained 2.86% to 73.86 dollars.
US job creations remained strong but rose less than expected to 209,000 in June.
“This suggests that the US Federal Reserve (Fed) may not keep interest rates high for as long as expected, which alleviates the impact this could have on energy demand,” Andy commented. Lipow of Lipow Oil Associates.
But the oil market also remains concerned about persistent supply cuts, which is driving prices up.
“Prices have risen lately in response to Saudi Arabia’s extension of production cuts while Russian exports have fallen,” Lipow said.
On Tuesday, Saudi Arabia and Russia, two major crude-producing countries, announced cuts in their supply.
“This comes at the same time as a continued decline in US oil inventories,” said the analyst, as commercial crude reserves in the United States fell by 1.5 million barrels last week after – 9.6 million barrels the week before.
Faced with what appears to be a shortfall in supply, many economic indicators are simultaneously fueling persistent fears of weakening demand.
In China, activity in services grew in June but at one of the weakest rates of the year, the latest sign of the country’s post-COVID-19 recovery running out of steam.
“In the other two major (oil)-demanding regions, the United States and Western Europe, still high levels of inflation are forcing the Fed and the ECB (European Central Bank) to raise key interest rates further. , despite the massive increases already made,” said Carsten Fritsch of Commerzbank.
These increases should have “an impact on economic development”, he continued, indicating that economists at Commerzbank expect the United States and the euro zone to enter recession in the second half of the year.
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