By Adedapo Adesanya
Oil prices slid on Friday as investors weighed reassurances from the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) against the latest jobs data in the United States that lowered expectations that the Federal Reserve will cut interest rates soon, with Brent crude futures losing 25 cents to settle at $79.62 per barrel and the US West Texas Intermediate (WTI) down by 2 cents to $75.53 per barrel.
Data showed US jobs growth accelerated far more than expected in May, keeping the US Federal Reserve on track to hold off starting to cut interest rates until September at the earliest.
The European Central Bank (ECB) went ahead with its first interest rate cut since 2019 on Thursday, despite an increasingly uncertain inflation outlook.
High borrowing costs can slow economic activity and dampen demand for oil.
Market analysts noted that the jobs report indicated higher rates for longer, a trend that tends to dampen enthusiasm for the oil market.
Meanwhile, both benchmarks posted a third straight weekly loss. Brent was down 2.5 per cent and WTI fell off by 1.9 per cent.
Earlier in the week, after OPEC+ members announced that they would start phasing out 2.2 million barrels per day in production cuts starting in October, there was an indication of rising supply, which is bearish for prices.
Poor US manufacturing data and weak private payrolls also weighed on the market.
Also pressuring the market, the US Dollar rallied 0.8 per cent to a more than one-week high shortly after the release of the jobs report.
However, oil prices have been buttressed by support from OPEC+ members Saudi Arabia and Russia, indicating readiness to pause or reverse oil output increases.
In China, data showed that although exports grew for a second month in May, crude oil imports fell, signalling demand concerns in the world’s largest crude oil buyer.
In Russia, the operations of the Novoshakhtinsk oil refinery in the southern Rostov region suffered significant disruptions after a fire following a drone attack on Thursday.
The US active oil rig count, an early indicator of future output, fell by four this week to 492, the lowest since January 2022, energy services firm Baker Hughes said.