Oil at month high; U.S. rate hike fears cooled somewhat by soft jobs report
Investing.com — Oil bulls are finally getting a break on rate hike concerns after a softer-than-expected U.S. jobs report for June suggested some tempering in the Fed’s hawkishness when the central bank’s policy-makers sit for their next rate review in three weeks.
Also helping sentiment was a weekly report on U.S. oil inventories, published Thursday, that showed across-the-board draws for crude and fuel.
U.S. crude hit a one-month high with New York-based WTI, or West Texas Intermediate, reaching nearly $74 the first time since June 5 with an intraday high of $73.91 per barrel. The U.S. crude benchmark settled up $2.06, or 2.9%, at $73.86.
London-based Brent settled up $1.95, or 2.6%, at $78.47 after a one-month high of $78.53.
For the week, WTI was up 4.6%, adding to the previous week’s 2.1% gain. Brent rose 4.8% on the week after the prior week’s 1.4% rise.
“Could we finally be about to see a breakout in oil prices after two months of consolidation?” Craig Erlam, analyst at online trading platform OANDA, asked in a market commentary, adding: “The rally over the last week or so from the range lows has been quite strong and backed by momentum.”
Oil rallied after the Labor Department reported that U.S. employers added 209,000 nonfarm payrolls in June, a number that came in below economists’ estimates for the first time in 16 months, signaling progress in the Federal Reserve’s bid to fight inflation with higher interest rates.
Wall Street’s economists had expected a jobs growth of 225,000 for last month, from a previously published 339,000 for May which the Labor Department revised down to 306,000 on Friday.
The unemployment rate remained unchanged in June at 3.6% while wages expanded by 0.4% from a 0.3% growth in
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