Adedapo Adesanya
By Adedapo Adesanya
Crude oil prices rose more than 2 per cent on Friday after data from the world’s largest oil producer, the United States, supported expectations of demand growth.
Brent crude futures settled at $75.84 a barrel after chalking up $1.79 or 2.4 per cent, as the US West Texas Intermediate (WTI) crude futures traded at $71.23 after gaining $1.89 or 2.7 per cent.
Despite the gain at the final session of the week, both benchmarks fell for a seventh straight week, their longest streak of weekly declines in half a decade, on lingering oversupply concerns.
For the week, they lost 3.8 per cent after hitting their lowest since late June on Thursday, a sign that many traders believe the market is oversupplied.
US Labor Department data released showed stronger-than-expected job growth, signs of underlying labor market strength that should support fuel demand in the biggest oil market.
The US workforce added 199,000 jobs last month, a robust reading as the world’s largest economy continues to grapple with higher interest rates.
Employment growth has been fading this year after the US Federal Reserve launched an aggressive campaign to pull back inflation from its highest levels in a generation.
The data bolstered hopes that the US central bank will manage to guide the world’s largest economy to a so-called “soft landing”, where price growth normalises and recession is avoided.
That followed government data on Wednesday showing US gasoline (petrol) demand last week underperformed the 10-year seasonal average by 2.5 per cent and gasoline stocks rose by 5.4 million barrels.
More support came as result of demand enthusiasm as data showed US consumer sentiment perked up much more than expected in December.
Yet, pressure came as Chinese customs data showed its crude oil imports in November fell 9 per cent from a year earlier as high inventory levels, weak economic indicators and slowing orders from independent refiners weakened demand.
On the supply front, Saudi Arabia and Russia, the world’s two biggest oil exporters, on Thursday called for all members of the Organisation of the Petroleum Exporting Countries and its allies, OPEC+, to join an agreement on output cuts just days after a fractious meeting of the producers’ club.
The alliance last week agreed to a combined 2.2 million barrels per day in output cuts for the first quarter of next year.
However, the market has been concerned, however, that some members including Nigeria and Angola may not adhere to their commitments.
