Oil prices fall on strong US jobs report

10 Jun 2024 , 08:29 AM

Due to a stronger dollar and the deferral of interest rate cut expectations after positive U.S. jobs data on Friday, oil prices fell for the second straight session on Monday.

Both U.S. West Texas Intermediate and Brent crude futures were down 4 cents a barrel, at $75.49 and $79.58, respectively.

Data released on Friday revealed that the United States created more jobs last month than anticipated, which caused investors to lower their expectations for rate cuts and the dollar to rise.

For holders of other currencies, dollar-denominated goods like oil become more expensive due to a higher dollar.

The pressure on the euro also reflected the unpredictability in the eurozone following the announcement by French President Emmanuel Macron of early legislative elections for later in June, following his party’s crushing defeat in the European Union election.

Due to worries that an October production cut plan by the Organisation of the Petroleum Exporting Countries and their allies, or OPEC+, will contribute to an increase in world supply, Brent and WTI reported their third consecutive weekly loss last week.

According to energy consultancy FGE, the news was made at the same time that total commercial OECD crude and product stockpiles on land increased to an estimated 48 million barrels in May, up from an average build of 30 million barrels between 2015 and 2019.

Following a decline in prices, the United States government increased its purchases of crude oil to restock the Strategic Petroleum Reserve.

Energy services company Baker Hughes said on Friday that U.S. energy companies reduced the number of oil and natural gas rigs operating last week to the lowest level since January 2022.

Iraq’s Oil Minister, Hayan Abdel-Ghani, reported that negotiations to resume oil exports through the Iraq-Turkey oil pipeline, which previously supplied roughly 0.5% of the world’s oil supply, have made headway with officials from the Kurdistan region and representatives of foreign businesses doing business there.

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