Oil Prices Rise on Nonfarm Payrolls Report and OPEC+ Output Delay
Oil prices saw an increase as investors analyzed the nonfarm payrolls report and took into consideration a significant withdrawal from US crude inventories and a planned output delay from OPEC+ producers.
By 09:08 ET (13:08 GMT), the Brent crude oil contract rose by 0.7% to $73.16 per barrel, while WTI futures traded up by 0.6% at $69.58 a barrel. Both contracts were set to show declines for the week.
The August nonfarm payrolls report revealed that the US economy added fewer jobs than expected, but showed an improvement from July. This data could impact the Federal Reserve’s upcoming policy decisions.
Nonfarm payrolls for August came in at 142,000, up from a revised figure of 89,000 in July. Economists had predicted a reading of 164,000. The US unemployment rate was 4.2%, matching estimates.
Additionally, average hourly earnings growth for the month increased by 0.4% after a decline in July.
Following the release of the report, there was a growing expectation that the Fed could implement a larger 50 basis-point rate cut instead of a smaller 25 basis-point reduction. This anticipation of lower interest rates is generally supportive of crude prices, as it could stimulate economic activity and oil demand.
US crude stockpiles decreased by 6.9 million barrels to 418.3 million barrels in the week ending on Aug. 30, surpassing analysts’ forecast of a 1 million barrel draw.
Moreover, the OPEC+ group decided to delay a planned increase in oil production for October and November.
Despite these positive developments, Brent settled at a more than one-year low on Thursday, partly due to concerns about demand in the US and China.