Investing.com – Last week saw crude oil futures fall sharply, tumbling to a nine-month low on Friday before pulling back, as concerns over the U.S. economic recovery and lingering fears over sovereign debt contagion in the euro zone prompted investors to shun riskier assets.
On the New York Mercantile Exchange, light sweet crude futures for delivery in September traded at USD87.08 a barrel by close of trade on Friday, plunging 9.5% over the week, its second consecutive weekly decline and the biggest drop since early May.
It earlier fell to USD83.03 a barrel, the lowest price since November 26, 2010.
Crude prices bounced off the nine-month low on Friday after the U.S. Department of Labor said that nonfarm payrolls rose by 117,000 in July, above expectations for an increase of 95,000, while the previous month’s figure was revised up to a gain of 46,000 from a previously reported 18,000.
The unemployment rate dipped unexpectedly to 9.1% from 9.2%, the first decline in four months.
However, the better-than-expected jobs data failed to ease fears that the U.S. economic recovery was stalling, after a flurry of weak data earlier in the week fuelled concerns over a possible double-dip recession, underlining concerns over the short-term demand outlook from the world’s largest oil consumer.
The U.S. Energy Information Administration said in its weekly report on Wednesday that U.S. crude supplies increased by 1.0 million barrels last week, rising for the second consecutive week.
Total motor gasoline inventories rose by 1.7 million barrels, significantly higher than expectations for a 0.5 million barrel increase and the biggest gain since early April.
Global financial service provider Credit Agricole lowered its one-month price forecast for crude to USD85 a barrel, citing the uncertain economic outlook, it said in a report on Friday.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for September delivery traded at USD109.49 a barrel by close of trade on Friday, tumbling 6.3% on the week and up USD22.41 on its U.S. counterpart.
After markets closed Friday, ratings agency Standard and Poor's downgraded the U.S. sovereign debt rating by one notch to AA+ from AAA, and kept the rating outlook at negative, suggesting a further downgrade could be possible within the next 12 to 18 months.
S&P said the debt ceiling deal reached by lawmakers to cut the federal deficit by an estimated USD2.1 trillion over a decade did not go far enough and “America’s governance and policymaking is becoming less stable, less effective, and less predictable than what we previously believed.”
In the week ahead, markets will get their first chance to react to the historic U.S. debt downgrade. Traders will also be paying close attention to Tuesday’s Federal Reserve rate announcement and its statement on monetary policy for any hints regarding further easing.
On the New York Mercantile Exchange, light sweet crude futures for delivery in September traded at USD87.08 a barrel by close of trade on Friday, plunging 9.5% over the week, its second consecutive weekly decline and the biggest drop since early May.
It earlier fell to USD83.03 a barrel, the lowest price since November 26, 2010.
Crude prices bounced off the nine-month low on Friday after the U.S. Department of Labor said that nonfarm payrolls rose by 117,000 in July, above expectations for an increase of 95,000, while the previous month’s figure was revised up to a gain of 46,000 from a previously reported 18,000.
The unemployment rate dipped unexpectedly to 9.1% from 9.2%, the first decline in four months.
However, the better-than-expected jobs data failed to ease fears that the U.S. economic recovery was stalling, after a flurry of weak data earlier in the week fuelled concerns over a possible double-dip recession, underlining concerns over the short-term demand outlook from the world’s largest oil consumer.
The U.S. Energy Information Administration said in its weekly report on Wednesday that U.S. crude supplies increased by 1.0 million barrels last week, rising for the second consecutive week.
Total motor gasoline inventories rose by 1.7 million barrels, significantly higher than expectations for a 0.5 million barrel increase and the biggest gain since early April.
Global financial service provider Credit Agricole lowered its one-month price forecast for crude to USD85 a barrel, citing the uncertain economic outlook, it said in a report on Friday.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for September delivery traded at USD109.49 a barrel by close of trade on Friday, tumbling 6.3% on the week and up USD22.41 on its U.S. counterpart.
After markets closed Friday, ratings agency Standard and Poor's downgraded the U.S. sovereign debt rating by one notch to AA+ from AAA, and kept the rating outlook at negative, suggesting a further downgrade could be possible within the next 12 to 18 months.
S&P said the debt ceiling deal reached by lawmakers to cut the federal deficit by an estimated USD2.1 trillion over a decade did not go far enough and “America’s governance and policymaking is becoming less stable, less effective, and less predictable than what we previously believed.”
In the week ahead, markets will get their first chance to react to the historic U.S. debt downgrade. Traders will also be paying close attention to Tuesday’s Federal Reserve rate announcement and its statement on monetary policy for any hints regarding further easing.