Oil eked out a gain on Friday as a forecast-topping US jobs report signaled a strong domestic economy to go along with the supply disruptions squeezing global crude markets.
Futures in New York rose 0.2 percent after unemployment unexpectedly fell to a 49-year low in the US, with cooler-than-projected wage gains.
Crude nonetheless recorded a loss for the week as investors digested a big surge in US production.
“The demand picture has been one possible weak leg for petroleum and this helps to alleviate that concern,” said Kyle Cooper, a consultant at Ion Energy Group in Houston, Texas. “You’ve got minimal-to-moderate inflation with solid growth — that’s your Goldilocks economy.”
West Texas Intermediate crude for June delivery climbed US$0.13 to US$61.94 a barrel at the close of trading on the New York Mercantile Exchange. It finished the week down 2.2 percent, the second straight weekly decline after seven straight gains.
Brent for July settlement rose US$0.10 to US$70.85 a barrel on the London-based ICE Futures Europe exchange. It was down 1.8 percent for the week.
The US hiring numbers accomplished what an attempted coup in Venezuela, tougher sanctions on Iran and disrupted flows from Russia have failed to do in the past few days: push oil markets into positive territory.
Crude’s indifference to the array of threats reflected that world markets appear comfortably supplied for the time being, largely thanks to the ongoing surge in US production, which hit a new record last week.
Prices have also been capped by worries about the global economy, with manufacturing data from China and the US showing that growth remains fragile.
Brent increased 27 percent in the first quarter of this year, its strongest in a decade, on production cutbacks by OPEC and its partners, but lately the rally has lost steam.
“It shows that in an age of OPEC-led production restraint and geopolitical concerns, surging US oil output is more than capable of stunting upward pricing pressures,” said Stephen Brennock, an analyst at PVM Oil Associates Ltd in London.
There has been no shortage of catalysts to give the market a renewed boost.
In OPEC member Venezuela, Venezuelan National Assembly President Juan Guaido on Tuesday launched an uprising against Venezuelan President Nicolas Maduro with the backing of the US government.
The country’s oil output has already plummeted to the lowest in decades because of an economic meltdown and is at risk of collapsing entirely if the political standoff escalates.
Fellow OPEC nation Iran suffered another blow on Thursday as the US tightened sanctions, ending a system of waivers that had allowed several countries to continue purchasing Iranian crude.
The crackdown could slash Iran’s exports by as much as 900,000 barrels a day, or about two-thirds, according to Goldman Sachs Group Inc.
Saudi Arabia, the world’s biggest oil exporter, has given mixed signals on how quickly it would heed US President Donald Trump’s call to fill the resulting supply gap.
The political situation in a third OPEC producer, Libya, remains fraught as militia commander Khalifa Haftar keeps up his campaign to wrest the capital, Tripoli, from government forces.
In addition to these impending and potential supply risks, there has also been interruption to oil flows.
Supplies from Russia to eastern Europe along the country’s biggest export pipeline have been disrupted since April 21 as a result of chemical contamination.
Restoring normal flows might take months, a spokeswoman for Belarusian state petrochemical company Belneftekhim said on Tuesday, although Russian Deputy Prime Minister Dmitry Kozak gave a more upbeat estimate of two weeks.
There is a sustained gusher of new oil flooding in from the US, as the nation’s shale boom continues.
Production reached a record 12.3 million barrels a day last week, and crude stockpiles swelled by 9.93 million barrels, the US Energy Information Administration said.
That is more than four times what analysts had anticipated.
Despite Friday’s jobs report, there were also persistent concerns about the demand outlook amid slowing global economic growth, and the drag from the unresolved trade dispute between the US and China.
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