Oil pared gains on Friday after data showed U.S. employment increased less than expected in August, and was on track for a heavy weekly loss as demand concerns outweighed a delay to supply increases by OPEC+ producers.
Brent crude futures rose 29 cents, or 0.4%, to $72.98 a barrel by 1320 GMT. U.S. West Texas Intermediate crude futures were up 42 cents, or 0.6%, at $69.57.
For the week, Brent was on course to register a 7% decline, while WTI was heading for a drop of around 5%.
U.S. employment increased less than expected in August, but a drop in the jobless rate to 4.2% suggested an orderly labour market slowdown continued and probably did not warrant a big interest rate cut from the Federal Reserve this month.
“Chinese and U.S. economic concerns, the diminishing ability of the (OPEC+) producer group to influence the oil market, and its ample spare capacity … imply that further weakness is very much possible and upside potential is more limited than a month ago,” said PVM analyst Tamas Varga. On Thursday, Brent settled at its lowest since June 2023 as worries about U.S. and Chinese demand offset support from a big withdrawal from U.S. oil inventories and Thursday’s decision by OPEC+ to delay planned oil output increases. Crude stockpiles fell by 6.9 million barrels to 418.3 million barrels, compared with a projected decline of 993,000 barrels in a Reuters poll of analysts. Signals that Libya’s rival factions could be closer to an agreement to end the dispute that has halted the country’s oil exports also pressured oil prices this week.
Exports remain mostly shut in but some loadings have been permitted from storage.
Bank of America lowered its Brent price forecast for the second half of 2024 to $75 a barrel from almost $90 previously, it said in a note on Friday, citing building global inventories, weaker demand growth and OPEC+ spare production capacity.