
Oil Prices Face Third Weekly Loss as Demand Concerns Persist Amid Easing Rate-Cut Hopes
Oil prices experienced a decline for the third consecutive week, finishing lower on Friday due to worries about demand and diminishing expectations for a rate cut in September.
As of 14:30 ET, crude oil fell 0.3% to $79.62 per barrel, while Brent crude decreased by 0.03% to $75.53 per barrel.
### Payrolls Exceed Expectations, Affecting Rate Cut Speculations
Recent data revealed that the U.S. economy added more jobs than anticipated in the last month, with nonfarm payrolls increasing by 272,000 in May, a sharp rise from April’s revised figure of 165,000. This figure exceeds the average monthly gain of 232,000 recorded over the past year.
The stronger-than-expected job growth comes on the heels of a series of weaker U.S. economic indicators that had heightened concerns about diminishing demand. However, it also increased expectations that the Federal Reserve may consider lowering interest rates by September. Currently, the Fed is likely to keep rates unchanged for the time being, and a decrease could potentially stimulate economic activity, thereby supporting oil prices in the future.
### Rig Count Decline Amid Oversupply Worries
Baker Hughes reported a reduction in the number of U.S. oil rigs, which fell by four to a total of 469 in the week ending June 7. This decrease in rig counts contributes to ongoing concerns about oversupply in the market, especially after OPEC+ indicated potential adjustments to its production cuts during a recent meeting.
Energy ministers from Saudi Arabia, the United Arab Emirates, and Russia noted that the market’s weaknesses might lead the group to further tighten supply. Following their meeting, OPEC+ confirmed it would maintain cuts of 3.6 million barrels per day until the end of 2024, while outlining plans to gradually reduce cuts by 2.2 million barrels per day between October 2024 and September 2025.