Oil prices edger higher after US draw; hefty weekly losses likely

August 22, 2024 11:05 PM AEST | By Investing

Oil prices edger higher after US draw; hefty weekly losses likely

US inventories shrink more than expected

Official data, released on Wednesday, showed oil inventories shrank by 4.6 million barrels in the week to August 16, much more than the expected 2 million barrels expected.

Additionally, outsized draws in both distillates and gasoline stockpiles suggested that fuel demand remained robust in the largest economy in the world even as the travel-heavy summer season wound down.

Weak US labor data triggers deeper losses in oil

However, gains are mild Thursday, and follow four straight losing sessions, after data released Wednesday by the U.S. labor department showed the U.S. economy added much fewer jobs than initially estimated.

The Bureau of Labor Statistics revised down March 2024’s employment gains by 818,000 positions, as part of an annual review of payrolls data.

The reading sparked renewed concerns over a U.S. recession, especially after weaker-than-expected labor data for July triggered a broad risk-off sentiment across global financial markets.

While the softer labor market reading did cement expectations for an interest rate cut in September, it also added to concerns that the Federal Reserve may be too late in cutting rates, and that the U.S. economy was headed for a hard landing.

Such a scenario bodes poorly for demand in the world’s biggest fuel consumer, especially as recent data showed oil production in the country hit a record high of over 13 million barrels per day.

Traders remain uncertain over the outlook for demand later this year, especially after weak economic readings from China fueled concerns over slowing demand in the face of a slowdown in the world’s biggest oil importer.

(Ambar Warrick contributed to this article.)

This article first appeared in Investing.com

Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (“Kalkine Media, we or us”), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary.
The content published on Kalkine Media also includes feeds sourced from third-party providers. Kalkine does not assert any ownership rights over the content provided by these third-party sources. The inclusion of such feeds on the Website is for informational purposes only. Kalkine does not guarantee the accuracy, completeness, or reliability of the content obtained from third-party feeds. Furthermore, Kalkine Media shall not be held liable for any errors, omissions, or inaccuracies in the content obtained from third-party feeds, nor for any damages or losses arising from the use of such content.
Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyrighted to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have made reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.
This disclaimer is subject to change without notice. Users are advised to review this disclaimer periodically for any updates or modifications.