Oil prices fall after healthy U.S. employment data; supply issues eyed
Investing.com — Oil prices fell Thursday after the latest U.S. labor market data suggested conditions remained tight, opening the possibility for further interest rate increases by the Federal Reserve with the Jackson Hole symposium in focus.
By 10:00 ET (14.00 GMT), the U.S. crude futures traded 0.4% lower at $78.61 a barrel, while the Brent contract dropped 0.3% to $83.00.
Both benchmarks are on course for losses of between 2% and 3% this week, which would be the second consecutive losing week after a seven-week upswing.
The number of Americans filing new claims for unemployment benefits fell last week, dropping 10,000 to a seasonally adjusted 230,000, as the labor market continued to defy expectations in the face of the Fed's prolonged interest hikes.
This labor market strength could provide the U.S. central bank with headroom to continue tightening monetary policy to combat elevated inflation, even after weak purchasing managers’ index readings from the U.S., and the eurozone, added to concerns that slowing economic growth will dent demand.
The much anticipated meeting of Federal Reserve officials in Jackson Hole, Wyoming starts later in the session, with Chair Jerome Powell scheduled to speak on Friday, just a few weeks before the central bank meets to decide the next move on interest rates.
Data on Wednesday also showed an unexpected, substantial build in U.S. gasoline and distillate inventories over the past week, which pointed to weakening U.S. fuel demand and largely overshadowed a bigger-than-expected draw in broader crude inventories.
Inventory levels aside, the Energy Information Administration report was noteworthy for the new three-year high estimates that it made for U.S. oil production.
Crude output was
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