By Adedapo Adesanya
The oil market was depressed on Friday and posted a weekly loss after better-than-expected United States jobs data indicated that the world’s largest economy was growing.
Brent crude futures lost 1.7 per cent or $1.37 to settle at $77.33 per barrel, and West Texas Intermediate (WTI) crude futures declined by 2 per cent or $1.54 to trade at $72.28 per barrel.
Both benchmarks lost roughly 7 per cent on the week.
High interest rates, which tend to dampen economic growth and oil demand in major economies, appear to be here to stay in the near term.
Data on Friday showed US employers added far more jobs in January than expected, reducing the chances of near-term US Federal Reserve rate cuts.
The Dollar jumped against all major currencies as a result, and a higher greenback makes oil, which is priced in the American currency, expensive for holders of other currencies.
Also keeping oil prices lower was an outage at British Petroleum’s 435,000 barrel-per-day oil refinery in Whiting, Indiana, following a power loss that disrupted operations on Thursday.
Although power at the refinery had been restored by midday on Friday, sources said BP had not yet set a date for restarting the plant.
Faltering growth in China and the possibility of some easing of tensions in the Middle East also reduced prices.
Concern over China’s economic recovery persisted, with the International Monetary Fund forecasting that the country’s economic growth would slow to 4.6 per cent in 2024 and decline further in the medium term to about 3.5 per cent in 2028.
Mediators are awaiting a response from Hamas to a proposal drafted last week with Israel and the US that was passed on by Egypt and Qatar for the war’s first extended ceasefire. The pause could ease the political risk looming over Gulf and Red Sea shipping lanes, which are key for global energy flows.
The Organisation of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, kept their output policy unchanged on Thursday. The group will decide in March whether to extend the voluntary oil production cuts that are in place for the first quarter.
OPEC+ has output cuts of 2.2 million barrels per day in place for the first quarter, as announced in November.
Also, US energy services firm Baker Hughes said the US oil rig count, an early indicator of future supply, held steady at 499 this week.
