By Peter Nurse
Investing.com — Oil prices edged higher Friday after U.S. jobs growth slowed in February, but the market is still set for the biggest weekly loss in five weeks on concerns that steep interest rate hikes in the U.S. will curb demand in the largest crude consumer in the world.
By 09:10 ET (14:10 GMT), futures traded 0.1% higher at $75.79 a barrel, while the contract rose 0.2% to $81.78 a barrel. Both benchmarks are on course to record losses of over 5% this week.
The U.S. economy continued to create jobs in February, as rose by 311,000, above the 205,000 consensus forecast. However, this was well below the revised 504,000 jobs seen in January.
Additionally, the rose to 3.6% from 3.4%, while wage growth eased and the average worker’s working hours fell, suggesting that the labor market is indeed starting to cool.
That said, hawkish comments from Federal Reserve Chair during his semi-annual testimony to Congress earlier this week have heightened expectations of further rate hikes in the world’s largest economy, clouding the growth outlook and thus the demand for energy.
The has climbed to three-month highs against a variety of rival currencies, making crude, and other commodities which are denominated in dollars, more expensive for buyers paying in other currencies.
The view is similar in Europe, where strong inflation figures mean that the , and likely the , are set to continue tightening monetary policy in the months to come.
Additionally, data this week out of China, the largest importer of crude in the world, has pointed to a slower-than-expected recovery from the Asian giant’s vital manufacturing sector.
Crude oil imports came in this week down 1.3% from a year earlier over the first two months of 2023.
Worries over future demand have overshadowed a Platts report suggesting that OPEC’s output fell some 80,000 barrels a day in February.
There remains a great deal of uncertainty of the level of global supply this year given the Western sanctions on Russian output as a punishment for its assault on Ukraine.
Commitments of continued cooperation in setting output levels from Russian Foreign Minister Sergey Lavrov after a meeting with his Saudi Arabian counterpart have had little impact, as Russia has appeared to have angered some members of the OPEC bloc by unilaterally cutting production to support relative prices for its own exports.
’ estimate of the number of working U.S. oil rigs and round off the week.
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