By Ahmad Ghaddar and Deep Kaushik Vakil
LONDON (Reuters) -Oil prices steadied on Friday after weaker-than-expected U.S. jobs data, but kept on course for their steepest weekly loss in three months, weighed by concerns about demand and high interest rates.
Brent crude futures for July were up 17 cents, or 0.2%, to $83.84 a barrel at 1315 GMT. U.S. West Texas Intermediate crude for June was up 6 cents, or 0.1%, to $79.01 per barrel.
Both benchmarks are set for weekly losses as investors are concerned that higher-for-longer interest rates will curb economic growth in the U.S., the world’s leading oil consumer, as well as in other parts of the world.
Brent was on course for a weekly decline of about 6%, and WTI for a loss of 5.4% on the week.
“We view the commodities sell-off over the last two days as collateral damage from the Fed repricing and non-fundamental in nature,” JP Morgan analysts wrote in a note.
U.S. job growth slowed more than expected in April and annual wage gains cooled, data showed on Friday, prompting traders to raise bets that the U.S. Federal Reserve will deliver its first interest rate cut this year in September.
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.
Also on Friday, energy services firm Baker Hughes is due to release its weekly count of oil and gas rigs, an indicator of future crude output from the world’s top producer. [RIG/U]
Geopolitical risk premiums due to the Israel-Hamas war have also faded as the two sides consider a temporary ceasefire and hold talks with international mediators.
“Hopes of a ceasefire and a sharp rise in U.S. crude oil inventories have caused the price of a barrel of Brent crude to slip below $85,” said Commerzbank analyst Barbara Lambrecht.
Further ahead, the next meeting of OPEC+ oil producers – members of the Organization of the Petroleum Exporting Countries and allies including Russia – is set for June 1.
Three sources from the OPEC+ group said it could extend its voluntary oil output cuts beyond June if oil demand does not increase.
JP Morgan, which expects OPEC+ to extend cuts beyond June, said: “The stock builds in April will turn into draws in May through August and can push prices into the $90s in September.”
(Additional reporting by Sudarshan Varadhan in Singapore; Editing by Barbara Lewis and Mark Potter)
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