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Investing.com -- Oil prices fell Friday, on course for hefty weekly losses, as disappointing U.S. jobs data added to concerns that the U.S. economy, the largest crude consumer in the world, may be slowing.
By 09:25 ET (13.25 GMT), the U.S. crude futures traded 0.9% lower at $81.73 a barrel, while the Brent contract dropped 0.9% to $86.07 a barrel.
Weak payrolls points to prolonged Fed pause
The closely-watched U.S. nonfarm payrolls report showed that employers in the world's largest economy added 150,000 jobs during the month, down from a revised figure of 297,000 in September and below the expected 180,000.
The unemployment rate also came in at 3.9%, up from 3.8% in the prior month, while average hourly earnings increased by 0.2% month-on-month in October, following a 0.3% gain in September.
Although the U.S. economy is still adding jobs, the cooling in the expansion rate as well as the reduction in wage pressure pointed to a slowing economy, the largest in the world.
Hefty weekly crude losses likely
The two crude benchmarks are on course for losses of between 4% and 6%, their second consecutive week in red, as these weak figures added to the lack of escalation in the Israel-Hamas war which diluted worries about a disruption to supplies in this oil-rich region.
Israel was still carrying out a major ground assault on Gaza, while world powers attempted to broker a cease-fire to get some humanitarian aid into the war-torn region.
Iran also called for an oil supply embargo against Israel, while Israel continued to carry out a major ground assault on Gaza, but other members of the Organization of Petroleum Exporting Countries have failed to agree with this call.
Additionally, while a private sector survey, released earlier Friday, showed China's services activity expanded at a slightly faster pace in October, official numbers earlier in the week showed China's manufacturing activity unexpectedly contracted in October.
In Europe, French industrial production fell 0.5% in September, data showed Friday, adding further evidence that growth in this important energy consuming region is slowing.
Next Fed decision in focus
Still, this weak payrolls release could be seen as adding to the likelihood that the Fed will maintain its key Fed funds rate at a target of 5.25% to 5.50% throughout the rest of this year, after the central bank paused its rate-hiking cycle earlier this week.
The fear is that further interest rate hikes, to combat still elevated inflation, would severely impact economic activity, reducing demand for crude from this important region.
Markets are already widely betting that the Fed will choose to keep borrowing costs steady at its next meeting in December, with much of the debate now swirling around how long it will maintain rates at these current levels.
This data release saw the dollar sink sharply, with the dollar index down 0.7%, benefiting the crude market, as oil is in the greenback, making it cheaper for international buyers.
The week ends with the release of Baker Hughes oil rig count and CFTC positioning data, as usual.
(Ambar Warrick contributed to this item.)
