Oil prices decline further following tepid US economic data

Brent’s price moved lower after the US Bureau of Labor Statistics (BLS) released a weaker-than-expected US job market report on Friday, heightening concerns about the economic health of the world’s largest oil consumer.

PHOTO: Oil barrels and a pump jack with the US flag and Dollar bill in the background. Getty Images

The unemployment rate in the US “changed little” at 4.2% in August from 4.3% in July, the BLS reported. US employers added 142,000 jobs in August, according to the report. Global market analysts were expecting a much larger growth rate in US jobs.

“The Labor Department revealed the U.S. economy added 142,000 jobs in August, falling short of the 161,000 economists were banking on,” SPI Asset Management’s managing partner Stephen Innes said.

This news has raised demand growth concerns in the US, and put downward pressure on Brent’s price, according to analysts. “Weak jobs data in the US on Friday raised concerns over flagging oil demand in the world’s biggest consumer,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Last month, the US BLS revised the July employment report downward. US employers added 818,000 fewer jobs in the 12 months leading up to March 2024 than initially estimated, it stated.

“Oil prices, which have been utterly defenceless lately, didn’t stand a chance as the risk-off wave crashed through broader markets,” Innes added.

By Aparupa Mazumder

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