Oil prices increased by 3.6% during the week ending August 9 over recession fears in the US economy amid weaker-than-expected US jobs report and prospects of a Federal Reserve (Fed) interest rate cut for September, while renewed hopes for a Middle East cease-fire limited further price upticks.
The International benchmark Brent crude traded at $79.57 per barrel at 2.48 p.m. local time (1148 GMT) on Friday, up by around 3.6% relative to the closing price of $76.81 a barrel on Friday last week.
West Texas Intermediate (WTI), the American benchmark, traded at $76.53 a barrel at the same time on Friday, an increase of about 4.1% from last Friday’s session, which closed at $73.52 per barrel.
Last week’s employment report in the US showed that the US economy added 114,000 jobs in July, significantly below market estimates of 176,000, which heightened recession concerns and further fueled demand worries in the oil markets.
The weak data intensified concerns that the central bank may have acted too slowly to loosen monetary policy, potentially pushing the US economy into a recession.
Additionally, the anticipated Fed interest rate cut in September is expected to support upward price movements, as a rate cut would likely weaken the US dollar against other currencies, positively impacting oil demand.
According to data released by the Energy Information Administration (EIA) late Wednesday, U.S. commercial crude oil inventories decreased by approximately 3.7 million barrels to 429.3 million barrels, compared to the market prediction of a decline of around 1.6 million barrels for the week ending August 2.
Meanwhile, the potential for a cease-fire in the Middle East, home to the majority of global oil reserves, eases supply concerns in the markets and exerts downward pressure on prices.
On Thursday, Egyptian, Qatari, and US mediators urged Israel and Hamas to implement a cease-fire and hostage release deal with no further delays or excuses.
A trilateral joint statement published by the Qatari Amiri Diwan said: “There is no further time to waste nor excuses from any party for further delay.”
“The time has come to conclude the cease-fire and hostages and detainees release deal and implement this agreement.”
Following the joint cease-fire call, the office of Israeli Prime Minister Benjamin Netanyahu confirmed that Israel will send its negotiators to finalize the details of a hostage exchange deal.
“Pursuant to the proposal by the US and the mediators, Israel will – on 15 August – send the negotiations team to a place to be determined in order to finalize the details of the implementation of the framework agreement,” said Netanyahu’s office in a statement.
