Oil prices slump on demand concerns after weak US jobs data

August 02, 2024 11:30 PM AEST | By Investing

Oil prices slump on demand concerns after weak US jobs data

Oil heads for weekly losses as growth concerns mount

Both benchmarks were on course to lose over 3% this week, the fourth consecutive losing week, sinking to near two-month lows.

This weakness was driven chiefly by growing concerns that an economic slowdown will batter oil demand in the coming months. This was furthered by weak manufacturing PMIs from both the US and China this week, and additionally Friday with the release of soft U.S. labor market numbers.

Nonfarm payrolls came in at 114,000 last month, the lowest since January 2021, down from a revised 179,000 in June, while the unemployment rate rose to 4.3%, above the 4.1% expected..

China also remains a key point of worry for oil markets, as Beijing provided scant details on how it planned to shore up economic growth in the world’s biggest oil importer.

Middle East tensions remain in focus

Crude losses were limited on concerns over an all-out war in the Middle East.

Israel has been linked with the death of Hamas leader Ismail Haniyeh in Iran, ramping up concerns over retaliation by the Palestinian group and Iran.

Earlier in the week, Israel said it had killed Hezbollah commander Fouad Shukur in an airstrike, drawing ire from the Lebanon-based, Iran-backed group.

The prospect of an all-out war between Israel and its surrounding states saw traders attach some risk premium to oil prices, on the prospect of potential supply disruptions in the Middle East.

"For now, the market continues to try to balance these supply risks with the negative sentiment driven by demand concerns," said analysts at ING, in a note. "Weaker Chinese demand has been on the radar for some time now and weaker-than-expected macro data from the US will only add to these demand concerns."

(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.