Oil prices rose on Friday as investors remained cautious with some OPEC+ members agreeing to extend voluntary production cuts ahead of key U.S. employment data.
Brent crude futures rose 0.15 percent to $72.80, as of 5:28 GMT, while U.S. West Texas Intermediate (WTI) crude futures gained 0.14 percent to $69.25. Brent was on track to drop nearly 8 percent this week, while WTI was headed for almost a 6 percent decline.
U.S. labor market sparks caution
Investors have signaled caution as U.S. economic data showed a mixed view of the economy’s health this week ahead of the release of nonfarm payrolls data on Friday, which will likely impact the size of the potential interest rate cut this month.
U.S. services sector activity was steady in August, but private jobs growth slowed, signaling a weaker labor market. Investors may be cautious of an early-August sell-off scenario globally, which has impacted sentiment amid signals of a weakening job market.
In early August, oil prices fell by more than a dollar while Brent reached a seven-month low after fears of a U.S. recession triggered a global market sell-off. However, prices later recovered on worries of escalating geopolitical tensions in the Middle East.
Read: UAE gold prices rise, global rates set for weekly gains ahead of U.S. jobs data
Demand worries persist
In the previous session, Brent crude futures settled at over a one-year low as worries about U.S. and Chinese demand offset support from a big withdrawal from U.S. oil inventories and OPEC+’s decision to delay oil output increases.
Crude stockpiles fell by 6.9 million barrels to 418.3 million barrels due to lower imports. In addition, OPEC+ agreed to delay the oil production increase for October and November, the group said on Thursday, adding that it could further pause or reverse the hikes if necessary.
As supply remains constrained, demand worries remain a key driver of weak sentiment across the market. The U.S. dollar’s slump offered some support to oil prices, as it declined to nearly a one-week low on mixed signals from job market indicators. A weaker dollar makes oil cheaper for buyers holding other currencies.
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