Oil prices fell slightly this Friday, as a jobs report indicated a slower than expected economic recovery amid a persistent pandemic. Also, Hurricane Ida aftermath has weighed on prices as it halted most of the offshore oil and gas production of the U.S.
According to Reuters, Brent crude settled lower by 42 cents, or 0.58%, at $72.61 a barrel. At the same time, the West Texas Intermediate (WTI) crude futures were down 70 cents or 1%, at $69.29. Both contracts remained somewhat steady for the week, with the U.S. mix up 0,80%.
John Kilduff, a partner at Again Capital in New York, said about the oil prices performance. “Prices slipped on the employment report, which was clearly impacted by the Delta variant. This was a reality check that the coronavirus is still impacting demand,” he noted.
The jobs report released by the Labor Department noted that the U.S. economy created the lowest point of jobs in seven months in August. Hiring in the leisure and hospitality sector stalled amid a resurgence in COVID-19 infections, which weighed on demand at restaurants and hotels.
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On the other hand, non-farm payrolls experienced an increase of 235,000 jobs amid a softening in demand for services and persistent worker shortages as COVID-19 infections soared.
Meanwhile, as we reported previously, production at the U.S. Gulf of Mexico remained largely halted during the week and still to this Friday. Only a few companies onshore, refiners, restarted production at reduced levels. Those companies are ExxonMobil and PBF Energy.
About such matter, Bob Yawger, director of energy futures at Mizuho in New York, said. “I would expect production to come back online in the course of the next week, versus refineries coming back online over the next two weeks.”
Finally, some analysts consider that there is room for further oil gains, especially after the Organization of Petroleum Exporting Countries starts its monthly increases in oil production. The plan is to raise 400,000 barrels monthly over the next few months until all production curbs are phased out.