Oil prices stable after buoyant US payrolls

Brent, WTI down more than 4% this week

An oil pumpjack in Signal Hill, California. US West Texas Intermediate crude (WTI) was up 10 cents, or 0.1 per cent, at $75.82. - AFP

By Reuters

Published: Fri 10 Mar 2023, 7:32 PM

Oil prices were stable on Friday after better-than-expected U.S. employment data though both benchmarks remained on course to fall more than 4 per cent on the week amid U.S. interest rate hike jitters.

Brent rose 21 cents, or 0.3 per cent, to $81.80 a barrel by 1440 GMT. US West Texas Intermediate crude (WTI) was up 10 cents, or 0.1 per cent, at $75.82.

Expectations of further rate hikes in the world's largest economy and in Europe have clouded the global growth outlook and driven both crude benchmarks down almost 5 per cent so far this week, their worst drop since early February.

A strengthening dollar is also making oil more expensive for holders of other currencies.

Global shares, which often move in tandem with oil prices, hit a two-month low as investors dumped banks.

U.S. Federal Reserve Chair Jerome Powell has warned of higher and potentially faster rate hikes, saying the Fed was wrong in initially thinking inflation was "transitory". Its next decision meeting is planned for March 21-22.

Broader US employment data for February beat expectations with nonfarm payrolls rising by 311,000, compared with a expectations of 205,000 jobs added, according to a Reuters survey. This will likely ensure that the Federal Reserve will raise interest rates for longer, which analysts have said would weigh on oil prices.

On the supply side, major oil producers Saudi Arabia and Iran, both members of the Organization of the Petroleum Exporting Countries, re-established ties on Friday after days of previously undisclosed talks in Beijing.

Meanwhile, United States was reported to have privately urged some commodity traders to shed concerns about shipping price-capped Russian oil in a bid to shore up supply.

Investors are closely monitoring export cuts from Russia, which decided to trim oil output by 500,000 barrels per day in March.