Oil prices rebound after market sell-off on weak US jobs data
(MENAFN) Oil futures experienced a notable increase of over USD1 in early trading on Monday, as markets showed signs of recovery following a sell-off prompted by disappointing U.S. jobs data released last Friday. The price of U.S. West Texas Intermediate (WTI) crude rose by USD1, or 1.48 percent, reaching USD68.67 per barrel by 0146 GMT, while brent crude futures also climbed by 99 cents, or 1.39 percent, to USD72.05 per barrel, as indicated by data. Analysts attributed the rise in crude prices partly to concerns about a potential hurricane forming in the Gulf of Mexico, which could impact the U.S. Gulf Coast, a region responsible for around 60 percent of the country's refining capacity.
The U.S. National Hurricane Center reported that the weather system in the southwestern Gulf of Mexico is expected to intensify into a hurricane before reaching the northwestern U.S. Gulf Coast. This forecast contributed to the partial recovery in oil prices, which had been declining. According to independent market analyst Tina Teng, the markets have started to rebound following last week’s significant downturn. On Friday, Brent crude had fallen by 10 percent compared to its level the previous week, marking its lowest point since December 2021, while West Texas Intermediate crude dropped by 8 percent, reaching its lowest closing level since June 2023.
The sharp decline in crude oil prices last week, the largest in 11 months, was largely driven by a bleak economic outlook and weak U.S. labor data, which raised concerns about reduced oil demand in the world's largest consumer. A report from the U.S. Labor Department showed that non-farm payrolls in the United States increased by about 142,000 in August, falling short of economists’ expectations of 160,000 jobs, as estimated in a poll. Additionally, the report highlighted a downward revision of July's job growth figures to 89,000, further dampening market sentiment and intensifying fears of weaker demand for crude oil.
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