Oil Prices saw a $1 increase in early trading on Monday due to a potential hurricane approaching the U.S. Gulf Coast and a market rebound from a recent drop following disappointing U.S. jobs data on Friday.
West Texas Intermediate (WTI) crude futures climbed $1, or 1.48%, reaching $68.67 per barrel by 0146 GMT, while Brent crude futures rose 99 cents, or 1.39%, to $72.05 per barrel.
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Analysts attributed the rebound partly to the hurricane threat in the Gulf, which is expected to intensify into a hurricane before hitting the northwestern Gulf Coast. This area represents about 60% of U.S. refining capacity.
“Market sentiment improved somewhat after last week’s decline,” noted independent analyst Tina Teng.
On Friday, Brent crude fell 10% for the week, hitting its lowest level since December 2021, and WTI dropped 8%, reaching its lowest close since June 2023.
“This marked the largest weekly decline in crude oil prices in 11 months amid a deteriorating economic outlook,” said ANZ analysts. The weak U.S. jobs data raised concerns about declining oil demand in the world’s largest consumer.
The U.S. government’s jobs report revealed a smaller-than-expected increase of 142,000 nonfarm payrolls in August, with July’s figure revised down to 89,000—the smallest rise since December 2020.
A reduction in the jobless rate could lead the Federal Reserve to cut interest rates by 25 basis points rather than 50 this month. Lower interest rates usually boost oil demand by stimulating economic growth and making oil cheaper for non-dollar currency holders.
However, ongoing weak demand has limited price increases. Refining margins in Asia have fallen to their lowest seasonal levels since 2020 due to weak demand from major economies, and fuel oil exports to the U.S. Gulf Coast dropped to their lowest since January 2019 due to poor refining margins.
