- WTI takes advantage of the multiple favorable winds.
- The weakness of the US labor market fuels expectations that the Fed will reduce interest rates starting in September.
- Geopolitical risks accentuate fears of a tightening of oil supply.
The West Texas Intermediate (WTI), futures on NYMEX, extends its recovery to $79.00 in the European session on Monday. The price of oil rebounds after a six-day streak of losses thanks to multiple favorable winds. Black gold benefited from the fall of the US dollar, the worsening of the crisis in the Middle East and the increase in official oil sales prices by Saudi Arabia to several regions.
Dollar-denominated oil rises as the dollar's appeal darkens after crucial official U.S. labor market data for April remained weak. US Nonfarm Payrolls (NFP) data released on Friday reported that fewer jobs were created and the unemployment rate rose to 3.9%.
The weakness of the labor market leads to hopes that the Federal Reserve (Fed) will relax its restrictive policy on interest rates. The scenario is favorable for the price of oil, since its demand increases.
Meanwhile, geopolitical risks in the Middle East region have heightened fears of a tightening of oil supplies. A ceasefire between Israel and Palestine is less likely, with the former expected to extend its operation to Rafah, which is the southern part of Gaza.
On the other hand, Saudi Arabia has decided to raise the official selling prices (OSP) of its crude oil sold to Asia, northwest Europe and the Mediterranean in June, pointing to expectations of strong demand this summer, Reuters reports.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
