The price of crude oil rose on Friday, balking at the July U.S. jobs report, which suggested that the Federal Reserve could tighten further and limit the demand for crude oil.
WTI rose to $90.69 per barrel on Friday at 11:22 a.m. ET, up $1.20 (+2.43%) on the day. Crude oil prices would normally fall on the news that payroll figures had improved, with the market naturally making the assumption that the Fed could employ even more monetary tightening—a scenario that could dent crude oil demand.
Total nonfarm payrolls rose by 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 oil as the crude, priced in U.S. dollars, becomes more expensive for foreign buyers.
But the oil markets refused to play along, making gains despite the seemingly bearish factors. Crude oil prices have slumped over the last month—and particularly over the last week, with WTI coming off recent prices that were near $105 per barrel.
But the oil market remains tight, with OPEC+ adjusting down its outlook for a global surplus this year. The group agreed to adjust its production targets up by a small figure of 100,000 bpd for September, although 100% of the group’s production cuts were unwound as of August.
One day after the OPEC+ meeting, Saudi Arabia raised the price of its crude oil to all markets for most crude grades. This action is typically followed by other Gulf producers raising their crude prices in response as well. Saudi Arabia’s price hike for Arab Light for September loading to Asia is now at a record high of $9.80 a barrel over the Oman/Dubai price.
By Julianne Geiger for Oilprice.com
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