Oil closed slightly higher this Friday (5th) despite the appreciation of the dollar after a strong payroll. According to analysts, the data confirmed that the Federal Reserve (Fed) should continue its hawkish trajectory and that the US economy is not in recession.
On the New York Mercantile Exchange (Nymex), the barrel of WTI oil for September closed up 0.53% (US$ 0.47), at US$ 89.01, per barrel. In the week, there was a drop of 9.74%. Brent was up 0.85% ($0.80) on ICE to $94.92 a barrel, down 8.70% weekly.
Oil futures contracts weakened during the morning, due to the acceleration of the dollar abroad, which reacted to the release of the US jobs report, known as payroll.
The US economy created 528,000 jobs in July, in net terms. The result was well above the estimates of analysts consulted by the Broadcast projections, which ranged from 75,000 to 300,000 vacancies, with a median of 250,000. The US unemployment rate dropped to 3.5% in July from 3.6% in June, returning to the level of February 2020, before the covid-19 pandemic. In this case, the forecast was that the rate would remain at 3.6%.
Oxford Economics says that the payroll reinforces its expectation that the US Central Bank will raise interest rates by 75 basis points in September. In a report to clients, the consultancy says that the data “defies expectations of a loss of breath”.
CIBC believes that the data show that the country’s economy is not in recession. This reading that the US economy is not in recession helped oil to overcome the appreciation of the dollar abroad, which earlier dropped the commodity’s contracts in the futures market.
For Oanda economist Edward Moya, a rising dollar and the growing risk that the Fed will need to be more aggressive in tightening monetary policy is unnerving some energy traders.
“Oil prices are ending higher after a week fraught with global recession fears that have destroyed prospects for oil demand. A robust payroll is welcome news for the US economy and is helping oil offset some of this week’s losses.”
Capital Economics points out that concerns about the demand outlook have dragged the price of Brent oil to $90 a barrel this week. But supply-side concerns that pushed the price above $120 a barrel not long ago haven’t completely disappeared.
Source: CNN Brasil