Mumbai, 9 Sep (Commoditiescontrol): Crude oil prices jumped by a dollar in early trading on Monday, driven by concerns over a potential hurricane system approaching the U.S. Gulf Coast and a market rebound after Friday's weaker-than-expected U.S. jobs data. West Texas Intermediate (WTI) crude futures rose $1, or 1.48%, to $68.67 a barrel, while Brent crude gained 99 cents, or 1.39%, to reach $72.05 a barrel.
Analysts attributed the price increase partly to the looming threat of a hurricane in the U.S. Gulf Coast, a region responsible for about 60% of the country's refining capacity. The U.S. National Hurricane Center reported on Sunday that a weather system in the southwestern Gulf of Mexico is expected to intensify into a hurricane before making landfall along the northwestern Gulf Coast.
This bounce in prices follows a sharp decline last week, with Brent crude falling 10%, marking its lowest level since December 2021, and WTI dropping 8%, its lowest close since June 2023. The decline was the largest weekly fall in 11 months, driven by concerns over a weakening economic outlook.
Friday's U.S. government jobs report showed nonfarm payrolls increased by only 142,000 in August, the smallest gain since December 2020, raising fears of slowing oil demand in the world's largest consumer. The report also signaled a decline in the jobless rate, leading analysts to predict that the Federal Reserve may opt for a smaller, 25 basis point interest rate cut this month instead of a more significant half-point reduction.
Lower interest rates typically support oil demand by stimulating economic growth and making oil more affordable for holders of non-dollar currencies, further contributing to the price recovery.
(By Commoditiescontrol Bureau: 09820130172)
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