Oil rates continue surge over robust US employment data
Date
10/8/2024 5:43:30 AM
(MENAFN) Oil prices continued their upward trajectory on Monday, supported by better-than-expected US employment data. However, US President Joe Biden’s statements discouraging Israel from attacking Iranian oil fields have limited further price increases.
As of 10:43 AM local time (0743 GMT), the international benchmark brent crude rose by 0.78 percent, reaching USD78.49 per barrel, up from the previous session's close of USD77.88. Similarly, the US benchmark West Texas Intermediate (WTI) increased by 0.94 percent, climbing to USD74.76 per barrel after finishing at USD74.06 in the prior session.
The rise in oil prices is attributed to stronger-than-expected employment figures from the US, the world’s largest oil consumer. Non-farm payrolls increased by 254,000 in September, surpassing market expectations, while the unemployment rate dropped from 4.2 percent to 4.1 percent. This improvement in the labor market has boosted risk appetite in global markets, marking the strongest employment growth in six months and the lowest unemployment rate in three months.
Chicago Federal Reserve President Austan Goolsbee welcomed the positive employment news, interpreting the end of the dockworkers' strike as a favorable sign for the US economy. However, uncertainty surrounding the Federal Reserve's future decisions continues to impact oil prices. Goolsbee mentioned that most Fed policymakers expect interest rates to decline significantly next year, with a 25-basis-point cut anticipated in November. This potential rate reduction is expected to weaken the dollar against other currencies, which could subsequently increase demand for oil.
Biden's comments on October 3 regarding possible strikes on Iranian oil facilities following Tehran's missile launches into Israel initially pushed oil prices upward, but his subsequent remarks on October 4, discouraging such actions, tempered the price rally. "If I were in their shoes, I’d be considering other alternatives than striking oil fields,” Biden stated at the White House.
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