Oil prices jump $1 on Gulf Coast storm, post selloff recovery
Shafaq News/ Oil futures jumped by a dollar in early trading on Mondayas a potential hurricane system approached the U.S. Gulf Coast, and as marketsrecovered from a selloff following weaker-than-expected U.S. jobs data onFriday.
West Texas Intermediate crude futures rose $1, or 1.48%, to $68.67 abarrel by 0146 GMT. Brent crude futures were up 99 cents, or 1.39%, at $72.05 abarrel.
Analysts said the bounce was in part a reaction to a potential hurricanein the U.S. Gulf Coast.
A weather system in the southwestern Gulf of Mexico is forecast tobecome a hurricane before it reaches the northwestern U.S. Gulf Coast, the U.S.National Hurricane Center said on Sunday. The U.S. Gulf Coast accounts for some60% of U.S. refining capacity.
"Sentiment recovered somewhat from last week's selloff," saidindependent market analyst Tina Teng.
At the Friday close, Brent had dropped 10% on the week to the lowestlevel since December 2021, while WTI fell 8% to its lowest close since June2023.
"Crude oil recorded its biggest weekly fall in 11 months amid adarkening economic backdrop. Weak jobs data in the U.S. on Friday raisedconcerns over flagging oil demand in the world's biggest consumer," ANZanalysts wrote in a client note.
A highly anticipated U.S. government jobs report showed nonfarm payrollsincreased less than market watchers had expected in August, rising by 142,000,and the July figure was downwardly revised to an increase of 89,000, which wasthe smallest gain since an outright decline in December 2020.
A decline in the jobless rate points to the Federal Reserve cuttinginterest rates by just 25 basis points this month rather than a half-point ratecut, analysts said.
Lower interest rates typically increase oil demand by spurring economicgrowth and making oil cheaper for holders of non-dollar currencies.
But weak demand continued to cap price gains.
Refining margins in Asia have slipped to their lowest seasonal levelssince 2020 on weak demand from the two largest economies. Fuel oil exports tothe U.S. Gulf Coast fell to the lowest level since January 2019 last month onweaker refining margins.
(Reuters)
