Crude oil contracts rallied on Friday, October 6th, as the world market grapples with tight oil supplies. Despite this upward movement, oil prices witnessed a substantial decline over the week, driven by investor concerns regarding the potential impact of soaring oil prices on global demand.
WTI crude futures gained 48 cents, marking a 0.6% increase, to conclude the trading day at $82.79 per barrel. However, this positive finish came after a week of stark losses, with prices down 8.8% overall. Similarly, BRENT crude futures edged up 51 cents, also by 0.6%, ending the session at $84.58 per barrel, though they too experienced an 8.3% drop throughout the week.
The oil market remains underpinned by expectations of constrained oil supplies, especially if there is a resurgence in the Chinese economy accompanied by increased oil demand. Additionally, the possibility of OPEC and other oil-producing nations scaling back production volumes further contributes to the optimism.
Throughout the summer and early autumn, oil prices witnessed a notable surge due to concerns surrounding tight oil supplies. Notably, Saudi Arabia and Russia both opted to reduce oil production, with Saudi Arabia committed to these production cuts until year-end. Russia has also taken steps to decrease oil exports.
However, oil prices faced downward pressure from stronger-than-expected employment data, which has raised speculation about the U.S. Federal Reserve (Fed) implementing additional interest rate hikes. Long-term bond yields have surged to their highest levels in 16 years, further intensifying concerns about the economic outlook and its impact on oil demand.
The U.S. Labor Department reported on Friday, October 6th, that nonfarm payrolls witnessed a remarkable increase of 336,000 jobs in September, surpassing analysts’ expectations of 170,000. This figure represents the most significant surge in employment since January. The unemployment rate held steady at 3.8%, defying predictions of a drop to 3.7%.
In terms of wage growth, the average hourly wage for workers rose by 4.2% on a year-on-year basis in September, slightly below analysts’ anticipated 4.3%. When examined monthly, average hourly wages for workers inched up by 0.2%, falling short of analysts’ expectations of a 0.3% increase. Notably, hourly wages are a critical metric monitored by the Fed for signs of inflation.
The Spot Market is Open
Saturday, October 7, 2023
| Energy Updated at | USD Price | Change | %Change |
| Crude Oil 07.20 | 82.81 | +0.50 | +0.61% |