Oil prices rebounded slightly on Friday, ending a week of heavy losses for the “black gold”, after a surprisingly strong picture of the US labor market failed to ease fears of a global economic slowdown.
Crude edged up slightly after data released today showed the US economy added more 528,000 seats of work in July, when analysts’ estimates spoke of barely 250,000 seats.
At the same time, the Ministry of Labor revised upwards the figures for June on 398,000 seats instead 372,000 had initially announced, while the unemployment rate, while analysts had expected it to remain unchanged, fell to a five-decade low in 3.5% from 3.6%.
Traders’ fears about the potential impact of an economic slowdown on oil demand were further strengthened after the Bank of England raised interest rates by 50 basis points yesterday and warned that a long recession is expected in the UK well into the year.
“The labor market data was good news for the US economy and that helped oil pare some of the weekly losses. Despite concerns about a global economic slowdown, the oil market remains tight,” he said in a note. Edward Moya, Oanda analyst.
Major central banks, including the U.S. Federal Reserve, have been raising interest rates aggressively lately in an effort to de-escalate inflationary pressures while fueling fears of an impending recession.
“Traders are now less concerned about supply issues related to Russia’s war in Ukraine and are focusing on readings showing worsening demand amid more recessionary estimates. With US gasoline demand today at 9 % below last year’s levels and even lower since the summer of 2020, it is clear that prices above $100/bbl are not sustainable,” analysts at Sevens Report Research noted in a note on Friday.
In this climate, the slow press West Intermediate Texas September delivery strengthened on Friday by 47 cents or 0.5%to set its price at $89.01 per barrel. On a weekly basishowever, the losses they arrived at 9.7%with WTI “paying off” the 5-month low it hit on Thursday.
Similar movements for press oil Brent October delivery, which on Friday he added 80 cents or 0.9%at $94.92 a barrel. In the weekthe Brent fell 8.7%.