For the week, both Brent and WTI were down more than 8%, the biggest weekly turn-of-a-year drop since 2016. Both benchmarks had gained about 13% over the previous three weeks.
“The oil market may be regaining some composure after what it suffered earlier in the week, but upside potential remains limited, at least in the short term. The economic outlook is cloudy,” said Stephen Brennock, an analyst at PVM.
US service sector activity contracted for the first time in more than two and a half years. The Institute for Supply Management (ISM) said its non-manufacturing Purchasing Managers’ Index (PMI) fell to 49.6 last month, from 56.5 in November.
Another report showed that the US economy added jobs apace in December, bringing the unemployment rate back to its pre-pandemic low of 3.5%, as the labor market remains tight.
The US jobs report sent the dollar tumbling and world stocks rising as investors bet inflation is easing and the Federal Reserve won’t have to be as aggressive as some feared. .
A weaker dollar may boost demand for oil, as commodities traded in dollars are cheaper for buyers of other currencies.
Source: Ambito
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