Crude oil prices fell on Friday afternoon following reports of strong U.S. jobs data, with WTI crashing by more than 2.5% to $73.88
The U.S. January jobs report indicates that the jobs market is stronger than expected, with employers adding 517,000 in January. This compares to economists that had expected employers had added 185,000 jobs in January.
The unemployment rate in the United States is at 3.4%–the lowest rate since 1969, despite the round of tech layoffs.
The Fed’s aggressive interest rate hikes are not slowing hiring as some would have expected, with fears lingering that this could still lead to a recession. Still, wage growth seemed to slow.
With the ever-looming recession still looming, traders were slow to respond to Friday’s job data. WTI rose $0.55 per barrel to $76.43 (+0.72%) following the report, while Brent rose $0.46 to $82.63 (+0.56%). But prices quickly took a turn for the worse, with WTI falling $2 per barrel by 1:13 pm ET to $73.88 (-2.64%) per barrel. Brent had fallen by nearly the same amount to $80.21 (-2.39%) per barrel.
Both the WTI and Brent benchmarks are set for a sharp weekly decline.
Both benchmarks have slumped about $7 per barrel so far this week, despite signs that China’s crude oil demand could be recovering and the EU’s ban on Russian crude oil product imports, which goes into effect this Sunday.
Oil prices had already fallen earlier in the week as the United States Energy Information Administration data showed major builds in crude oil and crude products inventories, OPEC stuck to its guns and decided there wouldn’t be any changes to its output strategies at this time, and the Federal Reserve raised its target interest rate—and promised to continue those increases.