Oil settles down on US jobs data, steepest weekly loss in 3 months

Oil prices settled lower on Friday, and posted their steepest weekly loss in three months as investors weighed weak U.S. jobs data and possible timing of a Federal Reserve interest rate cut, Reuters reported.

Brent crude futures for July settled 71 cents lower, or 0.85%, to $82.96 a barrel. U.S. West Texas Intermediate crude for June fell 84 cents, or 1.06%, to $78.11 a barrel

Investors were concerned that higher-for-longer borrowing costs would curb economic growth in the U.S., the world’s leading oil consumer, after the Federal Reserve decided this week to hold interest rates steady.

For the week, Brent declined more than 7%, while WTI fell 6.8%.

U.S. job growth slowed more than expected in April and the annual wage gain cooled, data showed on Friday, prompting traders to raise bets that the U.S. central bank will deliver its first interest rate cut this year in September.

“The economy is slowing a little bit,” said Tim Snyder, economist at Matador Economics. “But (the data) gives a path forward for the Fed to have at least one rate cut this year,” he said.

The Fed held rates steady this week and flagged high inflation readings that could delay rate cuts. Higher rates typically weigh on the economy and can reduce oil demand.