Third Straight Weekly Loss For Oil As Demand Worries Persist And Fed Hopes Fade

Meanwhile, analysts continued to debate effects of the new OPEC strategy: File Image/Pixabay

Just as quickly as oil rose in the previous session due to strained hopes that the U.S. Federal Reserve would follow other central banks in lowering interest rates, the commodity on Friday dipped as the latest jobs data deflated expectations.

The Labor Department's employment report on Friday revealed that the economy created far more jobs than expected in May and annual wage growth reaccelerated, thus reducing the chance of the Fed cutting any time soon.

As a result, Brent settled down 25 cents at $79.62 per barrel, while West Texas Intermediate settled down 2 cents to $75.53; for the week, Brent was on track to fall about 2.5 percent and WTI was headed toward a 1.9 percent decline, the third straight weekly loss caused by demand concerns.

Analytical worries weren't confined to the U.S.: government data from China showed that although exports grew for a second month in May, crude oil imports fell – another troubling sign that demand may be weaker than thought.

Meanwhile, analysts debated the aftermath effects of the Organization of the Petroleum Exporting Countries (OPEC) earlier this week stating that they would tweak their latest output agreement if market support was required; the cartel had earlier agreed to extend most output cuts into 2025 but left room for eight members to unwind their cuts gradually.

JPMorgan Chase & Co. doubted the strategy would have a bearish effect because many members already are pumping above their assigned quotas; and Citigroup Inc. predicted full cuts will be maintained into next year.

John Evans, an analyst at PVM Oil Associates Ltd., said the "intervention showed decent success as it was very well-timed."

In other oil news on Friday, Bloomberg reported that Saudi Arabia is poised to raise at least $11.2 billion from the ongoing secondary offering of shares in state-owned Saudi Aramco; the Saudi government is expected to sell the 1.545 billion shares of Aramco on offer, or about 0.64 percent of the company's issued shares,  according to sources with knowledge of the matter.

Thursday was the deadline for potential investors to submit bids in the secondary offering; launched on June 2, the secondary offering sold out within hours.