- Total nonfarm payrolls rose 528,000 in July, well above expectations of a decline to 250,000.
- WTI crude rose from $88 a barrel to well above $90 a barrel.
- US dollar gained after the strong jobs report.
Crude oil prices rose on Friday, deterred by the July US jobs report, which suggested the Federal Reserve could tighten further and limit demand for crude oil.
WTI rose to $90.69 a barrel at 11:22 a.m. ET Friday, up $1.20 (+2.43%) on the day. Crude oil prices would normally fall on the news that wages had improved, with the market naturally assuming that the Fed could apply further monetary tightening – a scenario that could reduce demand for crude oil.
Total nonfarm payrolls rose 528,000 in July, well above expectations of a decline to 250,000. The dollar rose on the news – another typical bearish factor for crude, as crude oil, priced in US dollars, becomes more expensive for foreign buyers.
But the oil markets refused to play along and made gains despite the seemingly bearish factors. The price of crude oil has fallen over the past month – and especially this past week, with WTI coming off recent prices close to $105 a barrel.
But the oil market remains tight, with OPEC+ lowering its outlook for a global surplus this year. The group agreed to adjust its September production targets by a small amount of 100,000 barrels per day, although 100% of the group’s production cuts were settled in August.
A day after the OPEC+ meeting, Saudi Arabia increased the price of its crude oil to all markets for most crudes. This move is typically followed by other Gulf producers raising their crude oil prices in response. Saudi Arabia’s price increase for Arab Light for September shipments to Asia is now at a record high of $9.80 a barrel above the Oman/Dubai price.
By Julianne Geiger for Oilprice.com
More top readings from Oilprice.com:
Download the free Oilprice app today
back to home page