- Oil prices rose for the fourth straight session on Friday, boosted by positive U.S. jobs data that eased economic concerns.
- The U.S. Labor Department reported a significant drop in unemployment claims, suggesting resilience in the job market.
- Despite positive economic signals, oil markets are cautious due to the potential impact on Federal Reserve interest rate decisions.
Oil prices settled higher on Friday for the fourth consecutive session, after positive U.S. jobs data helped ease growing jitters about the state of the U.S. economy. Brent crude for September delivery was up 62 cents to trade at $79.78 per barrel at 16:45 hrs ET while the corresponding WTI crude contract was changing hands at $77.07/bbl, good for a 62 cents gain. The latest data by the Labor Department revealed that initial claims for state unemployment benefits fell 17,000 to a seasonally adjusted 233,000 for the week ended Aug. 3, the lowest level in 11 months. That figure came in lower than 240,000 jobless claims forecast by economists polled by Reuters. Overall, the U.S. economy grew at a 2.8% clip in the second quarter, double the growth pace in the first quarter. “The talk of an imminent recession seems wide of the mark,” Marc Chandler, chief market strategist at Bannockburn Global Forex, told Reuters. His sentiments are echoed by BlackRock saying the U.S. recession fears are overdone. The asset manager has argued that the July U.S. jobs report is more in-line with an economic slowdown than a recession. BlackRock notes that job creation is slowing, but averaged a robust 170,000 over the past three months; consumer spending, while cooling, remains relatively healthy and Q2 corporate earnings have so far topped expectations, with S&P 500 earnings growth projected at about 13%, above the 9% expected at the start of the season. BlackRock is the largest money manager in the world with $9.1 trillion in Assets Under Management (AUM). With oil markets now focusing more on the state of the U.S. economies and largely ignoring supply/demand fundamentals, another presidency by Republican candidate Donald Trump might not be a bad idea, after all.