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Habu Na Habu Abubakar
Sep 04, 2021 3:08PM ET
abubakar Abdullahi kano Nigeria
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Breaking News
Oil Down on Day after Dismal U.S. Jobs, Steady on Week
© Reuters.
By Barani Krishnan
Investing.com - Oil prices fell about 1% on Friday after an abysmal U.S. jobs report for August, although the bottom side for crude was limited by speculation that the Federal Reserve will hold off from tapering the stimulus it was providing the Covid-restrained economy.
London-traded Brent crude, the global benchmark for oil, settled at $72.61 per barrel, down 42 cents, or 0.6%, on the day. For the week, Brent lost just 0.1%.
New York-traded West Texas Intermediate, the benchmark for U.S. oil, settled the day at $69.29 per barrel, down 70 cents, or 1%. For the week, WTI rose 0.8%.
The U.S. Labor Department reported on Friday that employers added 235,000 jobs in August, less than a third of the forecast 733,000, amid continued struggles with the coronavirus pandemic. The only consolation was the August unemployment rate improving to 5.2% from July’s 5.4%.
While the shockingly low jobs growth initially weighed heavier on oil, speculation that the Fed will now hold off on its stimulus taper led crude prices to rise from their lows.
The Fed has been buying $120 billion in bonds and other assets since the Covid outbreak in March last year to support the economy. The central bank has also been keeping interest rates at virtually zero during that stretch.
“This dooms the chance of a September taper announcement and may even take (the) chance of a taper hint off the table,” economist Adam Button said in a post on ForexLive.
The Fed’s Federal Open Market Committee, or FOMC, meets September 21-22 to decide on rates and other policy matters.
After that meeting, the Fed will only get one other jobs report before its November FOMC meeting. “So this considerably dims the chance of a November taper announcement,” Button added.
The Fed’s aggressive stimulus program is being blamed for aggravating inflation in the United States, where prices of almost everything, from gasoline to houses, have risen multifold over the past year. The White House’s various trillion-dollar Covid relief programs, passed through Congress, have added to price pressures over the past 18 months, prompting investors to hedge the weak dollar against future of commodities such as oil and gold.
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Comments (6)
Lawan Musa
Sep 03, 2021 5:59PM ET
kano
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Vlad Lozovskiy
Sep 03, 2021 4:08PM ET
45 cents down is nothing.
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Robert Murphy
Sep 03, 2021 4:01PM ET
Oil is down because of jobs but we lost another 7 million barrele? Okay! Lol
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Barani Krishnan
Sep 03, 2021 4:01PM ET
It is what it is. Wall Street is made up dart-throwing chimpanzees running on stimulus steroids.
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Mart Mala
Sep 03, 2021 4:01PM ET
you just give us what sounds like a good fundamental on oil only to pour water on it with this comment. just because you dont know all the factors affecting the current oil moves prompts you to call it dart throwing game?
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Barani Krishnan
Sep 03, 2021 4:01PM ET
Mart Mala Let me put it to you this way: We had an abysmal jobs report, a horrible miss on expectations, and the Nasdaq hits another record high, the Dow loses just 75 points and the S&P is virtually unchanged. This isn't about stay-home stocks or fundamentals, this is sheer c*ck and bull. The truth is almost all of the market is made up of stimulus junkies -- all they care is the Fed continuing to pump free money into the economy. They care a d*mn about what that does to inflation or the damage inflicted on the economy in the longer run. I know this is a markets portal that serves investors and we're supposed to uphold the spirit of capitalism. But that doesn't deprive me of my right in expressing my opinion. What you read in the article are the views on oil by a professional market commentator/analyst. What you read in the comment field is the opinion of citizen witnessing the systemic annihilation of the American economy by the same capitalists his nation count on to build it.
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milena villa escobar
Sep 03, 2021 3:39PM ET
Buy gold and hold. Now it is just a question of when
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Fahmi Yazit
Sep 03, 2021 3:30PM ET
Who to blame then? Imbalance right? The oil and gasoline against the inflation?
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