Oil prices edge higher, but set for third straight weekly decline
Investing.com-- Oil prices edged higher Friday but remained on course for a third consecutive weekly decline, pressured by fears of a supply glut and lingering U.S.-China trade tensions.
At 09:10 ET (14:10 GMT), Brent Oil Futures were up 0.5% to $74.67 a barrel, while Crude Oil WTI Futures expiring in March were 0.5% higher to $70.94 a barrel.
Payrolls disappointed in January
The US economy added fewer jobs than anticipated in January, pointing to a slowing in labor demand, with nonfarm payrolls coming in at 143,000 in January, down from an upwardly-revised level of 307,000 in December. Economists had seen the number at 169,000.
Coupled with a similar increase in November's revised figure, the total revisions between the two months amounted to 100,000 roles.
However, this result, along with the unemployment rate cooling slightly to 4.0%, down from 4.1% in the previous month, has had little impact on the crude market as analysts warned that the figures may be distorted by revisions and extreme weather events during the month.
Trump’s pledge to boost production sparks oversupply risks
Despite Friday's gains, both contracts were set to lose over 2% this week as a combination of ongoing geopolitical uncertainties, a sharp jump in U.S. crude stockpiles, and Donald Trump’s pledge to boost production, sparked concerns about an oversupplied market.
On Thursday, President Donald Trump reiterated his commitment to increasing US oil production, aiming to lower energy costs and bolster energy independence.
This announcement exerted downward pressure on oil prices, which had already been experiencing declines.
The prospect of heightened US oil output raises fears of a supply glut, which typically leads to lower prices.
When supply outpaces demand, the surplus oil can saturate the market, driving prices down as producers compete to sell their products.
This comes after the Energy Information Administration reported a significantly higher-than-expected jump in weekly US crude inventories, reflecting weak demand.
Moreover, Trump has urged the Organization of the Petroleum Exporting Countries and allies, or OPEC+ to increase output, to mitigate supply disruption risks stemming from sanctions on Russia and Iran.
“The supply risks facing the market due to sanctions mean that the floor for oil prices is probably a little higher than we had expected coming into this year. However, much will depend on how trade relations progress,” ING analysts said in a recent note.
“A tougher stance from the US on trade will be a concern for global growth,” they added.
US-China tariff tensions persist
Prices have also faced headwinds as China retaliated against US tariffs by imposing duties on US imports, including liquefied natural gas , coal, crude oil, and farm equipment.
These developments have introduced uncertainty into the market, as traders assess the potential impact on global oil demand.
China’s counter-tariffs will be implemented early next week. Market participants are cautious and wait to see the impact of these tariffs.
(Ayushman Ojha contributed to this article.)