Oil jumps 7% on week as rally restarts on OPEC threat of more cuts
Investing.com — As OPEC, you just have to say it, and worry about doing it later, or not doing it at all. But the market will respond, as you want it to, and that’s all that matters.
Crude prices hit 7-month highs on Friday, jumping as much as 7% on the week, responding to growing market conviction that Saudi Arabia will extend in October its voluntary monthly production cut of one million barrels per day introduced in July.
Adding to that was data showing better-than-expected U.S. jobs growth in August despite a rise in unemployment, with the Labor Department reporting 187,000 new non-farm payrolls versus a forecast 170,000 and a jobless rate of 3.8% from July’s 3.5%. The jobs numbers, at the least, “signal interest rates may not rise any further”, something all risk assets seemed to take positively, said Craig Erlam, analyst at online trading platform OANDA.
On the oil production front, the Saudis hinted at the October cut a month ago, saying they could even be deeper than before if warranted — a threat ostensibly aimed at short-sellers who might try to take prices down. While they have yet to make it official, the Russians, who happen to be the Saudis’ main ally in the OPEC+ group of 23-oil producing countries, did both their sides a favor this week by saying more “actions” were coming in the way of the oil market.
The Russian disclosure came after data on Wednesday showed U.S. crude stockpiles tumbling a third week in a row as refiners ramped up fuel processing to meet demand ahead of Monday’s Labor Day holiday — which marks the last hurrah for summer travel each year.
With two days of back-to-back gains of 2% or more, New York-traded West Texas Intermediate, or WTI, crude settled Friday’s trade at $85.55 per
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