By Adedapo Adesanya
Crude oil declined on Friday, with Brent crude futures down by 71 cents or 0.85 per cent to $82.96 a barrel and the US West Texas Intermediate (WTI) crude futures lower by 84 cents or 1.06 per cent to $78.11 a barrel, as investors weighed weaker-than-expected jobs data and the timing of a Federal Reserve interest rate cut in the United States.
For the week, Brent recorded a decline of about 7 per cent while WTI made a loss of 6.5 per cent.
Investors are concerned that higher-for-longer interest rates will curb economic growth in the US, the world’s leading oil consumer, as well as in other parts of the world.
US job growth slowed more than expected in April and the annual wage gain cooled, data showed on Friday.
This prompted traders to raise bets that the US central bank will deliver its first interest rate cut this year in September.
The US Federal Reserve held rates steady this week and flagged high inflation readings that could delay rate cuts. Higher rates typically weigh on the economy and can reduce oil demand.
Analysts said the market is repricing the expected timing of possible rate cuts after the release of the monthly jobs data.
Geopolitical risk premiums due to the Israel-Hamas war have faded as the two sides consider a temporary ceasefire and hold talks with international mediators.
Further ahead, the next meeting of the Organisation of the Petroleum Exporting Countries and allies including Russia (OPEC+) is set for June 1, with speculations that the group could extend its voluntary oil output cuts beyond June if oil demand does not increase.
Baker Hughes said in its closely followed report on Friday that US energy companies cut the number of oil and natural gas rigs operating for a second week in a row, to the lowest since January 2022.
The oil and gas rig count, an early indicator of future output, fell by eight to 605 in the week to May 3, in the biggest weekly decline since September 2023. The number of oil rigs fell seven to 499 this week, in the biggest weekly drop since November 2023.