Crude Oil Falls for Third Straight Week Amid Rate Hike Concerns and Demand Worries

Mumbai, 8 Jun (Commoditiescontrol): Crude oil prices dipped on Friday, marking a third consecutive weekly loss as investors weighed OPEC+ reassurances against strong U.S. jobs data that dampened expectations of imminent Federal Reserve interest rate cuts. Brent crude futures settled 25 cents lower at $79.62 per barrel, while U.S. West Texas Intermediate (WTI) crude slipped by 2 cents to $75.53 per barrel.

May's robust U.S. jobs growth exceeded expectations, suggesting the Federal Reserve might delay interest rate cuts until at least September. Conversely, the European Central Bank made its first interest rate cut since 2019 on Thursday, despite uncertain inflation prospects. Higher borrowing costs typically slow economic activity, reducing oil demand.

Following the jobs report, the dollar surged 0.8% to a more than one-week high, further pressuring oil prices. Despite this, support from OPEC+ members Saudi Arabia and Russia, indicating a potential halt or reversal of output increases, provided some price stability.

Nevertheless, crude oil faced a third weekly decline due to demand concerns, with Brent down 2.5% and WTI off 1.9%. Analysts interpreted Sunday's OPEC+ meeting as signaling increased supply, negatively impacting prices earlier in the week.

In the U.S., the active oil rig count, a key future output indicator, dropped by four to 492 this week, the lowest since January 2022, according to energy services firm Baker Hughes.

Elsewhere, China's economic data showed that while exports grew for a second consecutive month in May, crude oil imports fell, raising demand concerns in the world's largest crude buyer.

In Russia, operations at the Novoshakhtinsk oil refinery in the southern Rostov region experienced significant disruptions following a fire caused by a drone attack on Thursday.

Additionally, the U.S. Commodity Futures Trading Commission (CFTC) reported that money managers reduced their net long positions in U.S. crude futures and options in the week ending June 4.

These factors combined to create a complex market environment, contributing to crude oil's continued price struggles.

(By Commoditiescontrol Bureau: 09820130172)