Crude futures closed lower on Wednesday, April 5th, as the market was pressured by recession concerns, which overshadowed the positive factors from a more-than-expected drop in US crude stocks. Despite the announcement by the Organization of the Petroleum Exporting Countries (OPEC) and OPEC Plus to reduce oil production.
WTI crude futures were down by 10 cents, or 0.1%, at $80.61 a barrel, while Brent crude futures rose by 5 cents, or 0.1%, to close at $84.99 a barrel.
The consistently weak economic data released by the US has made investors concerned that the economic slowdown would affect oil demand. Recently, Automatic Data Processing Inc. (ADP) reported that US private sector employment rose by just 145,000 in March, falling below analysts’ expectations of 210,000 jobs, after surging by 261,000 jobs in February.
The report came just one day after the US Labor Department revealed that job openings, a gauge of labor market demand, fell by 632,000 jobs to 9.9 million in February, which is the lowest level since May 2021 and below 10 million jobs for the first time since 2021, and below analysts’ expectations of 10.4 million jobs.
Investors are now waiting for the release of US nonfarm payrolls for March on Friday, which is expected to show employment numbers rising by only 238,000, compared to a jump of 311,000 jobs in February. The unemployment rate is also expected to remain steady at 3.6% in March. These numbers will provide insights into the labor market trends and the possible direction of the Federal Reserve’s interest rates.
The Spot Market is Open
Thursday, April 6, 2023