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Oil Prices Steady After Strong U.S. Jobs Report, But Demand Worries Weigh

Published 07/07/2019, 11:55 PM
Updated 07/09/2019, 05:13 AM
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Investing.com - Oil prices steadied on Monday in Asia. A better-than-expected U.S. jobs report was cited as a tailwind for the markets.

U.S. Crude Oil WTI Futures were up 0.2% to $57.61. International Brent Oil Futures were near flat at $64.26.

Oil markets posted weekly losses on concerns of weakening demand after data last week showed a much smaller-than-expected decline in U.S. crude inventories.

"Global growth remains the main factor holding back crude prices," said Alfonso Esparza, senior analyst at OANDA. "The OPEC+ deal will keep prices from falling too hard, but there must be an end to trade protectionism to assure the demand for energy products recovers."

However, promises of tighter OPEC supply extending into March 2020 limited fall of oil prices. A Reuters survey showing OPEC oil output had sunk to a new five-year low in June was also cited as supportive.

Prices initially rallied early last week on the feel-good news of progress in trade talks between the U.S. and China after the two sides agreed to resume discussion.

Meanwhile, expectations of a rate cut by the U.S. Federal Reserve this month dampened following the release of a better-than-expected U.S. employment report last Friday.

Employers added 224,000 jobs last month, the most in five months, the report showed.

Citing analysts, Reuters said the jobs report was a tailwind for the oil markets.

"A very cautious open this morning supported by a better than expected (non-farm payrolls)," said Stephen Innes, managing partner at Vanguard Markets in a Reuters report.

"Traders remain incredibly cautious about the dimmer global economic overhang," he added.

In other news, tensions in the Middle East remained after Europe urged Iran to reverse its latest decision on uranium enrichment.

It was reported that British Royal Marines helped the authorities in Gibraltar seize the ship on the basis of evidence that it was heading to Syria in breach of EU sanctions.

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