Oil prices edged down on Friday and posted a third straight week of losses as investors weighed OPEC+ reassurances against the latest U.S. jobs data that lowered expectations of the Federal Reserve cutting interest rates soon.
Brent crude futures settled 25 cents lower at $79.62 per barrel, while U.S. West Texas Intermediate (WTI) crude fell 2 cents to $75.53. The U.S. jobs growth in May exceeded expectations, keeping the Fed on track to hold off on cutting interest rates until September at the earliest.
The stronger-than-expected jobs report and the European Central Bank’s decision to proceed with its first interest rate cut since 2019 despite an uncertain inflation outlook dampened enthusiasm in the oil market. High borrowing costs can slow economic activity and reduce oil demand.
“The jobs report indicated higher rates for longer,” said Andrew Lipow, president of Lipow Oil Associates. “That tends to dampen enthusiasm on the oil market.”
The dollar rallied 0.8% to a more than one-week high shortly after the jobs report release, also weighing on oil prices.
However, oil prices have been supported by OPEC+ members Saudi Arabia and Russia, who indicated readiness to pause or reverse oil output increases. Still, crude fell for a third straight week on demand concerns, with Brent down 2.5% and WTI off 1.9%.
The lower oil prices also came after analysts saw Sunday’s OPEC+ meeting as a signal of rising supply, which is bearish for prices. Meanwhile, in China, data showed that exports grew for a second month in May, but crude oil imports fell, signaling demand concerns in the world’s largest crude oil buyer.
The U.S. active oil rig count, an early indicator of future output, fell by four this week to 492, the lowest since January 2022, according to energy services firm Baker Hughes.