Oil futures bounced Friday, but remain on track for sharp weekly losses as a much stronger-than-expected U.S. jobs report failed to fully dispel fears of a global economic slowdown.
West Texas Intermediate crude for September delivery
rose $1.19, or 1.4%, to $89.73 a barrel, on track for a 9% weekly fall. The U.S. benchmark closed Thursday at its lowest since Feb. 2.
October Brent crude
the global benchmark, gained $1.50, or 1.6%, to trade at $95.62 a barrel on ICE Futures Europe after closing Thursday at its lowest since Feb. 18. Brent was headed for an 8% weekly loss.
September natural gas
rose 0.9% to trade at $8.195 per million British thermal units.
Oil has dropped sharply this week, with fears of a sharp global economic slowdown and its potential impact on demand appearing to move front and center for investors. Worries were amplified Thursday after the Bank of England delivered a half-point interest rate increase and warned that a lengthy UK recession would likely take hold later this year.
Crude bounced off Friday lows after data showed the U.S. economy added 528,000 jobs in July, far exceeding the consensus estimate of 258,000 as the unemployment rate dropped to 3.5% from 3.6%.
“A robust nonfarm payroll is welcome news for the U.S, economy and that is helping oil pare some of this week’s losses. Europe also posted better-than-expected industrial production data from both Germany and France. Despite all the global economic slowdown worries, the oil market is still tight,” said Edward Moya, senior market analyst at Oanda, in a note.
Major central banks, including the U.S. Federal Reserve, have moved to aggressively raise interest rates in an effort to rein in inflationary pressures, while also stoking fears of sparking a recession.
“Traders are becoming much less concerned with the supply issues related to the Russia-Ukraine war and instead are beginning to watch demand metrics deteriorate amid a considerable uptick in recession calls. And with gasoline demand in the U.S. currently sitting 9% below last year’s levels and even lower than summer 2020, it is clear that prices above $100/barrel are not sustainable,” wrote analysts at Sevens Report Research, in a Friday note.