Oil Prices Drop $2 Amid OPEC+ Supply Concerns and US Job Data

Oil prices declined by $2 a barrel on Friday due to rising concerns regarding increased production from OPEC and its allies, alongside disappointing US job growth figures that raised fears about demand. Brent crude futures settled at $69.67 a barrel, reflecting a decrease of $2.03, or 2.83%. Meanwhile, US West Texas Intermediate crude ended at $67.33 a barrel, down $1.93, or 2.79%.

Despite the drop on Friday, Brent crude finished the week with a gain of nearly 6%, while WTI saw an increase of 6.29%. Analysts at the Al Attiyah Foundation indicated that OPEC members and their allies, collectively known as OPEC+, might finalize an agreement as early as Sunday to raise production by 548,000 barrels per day starting in September.

Adding to the tension in the oil market, the US Labor Department reported that the country added 73,000 jobs in July, which fell short of economists’ expectations. This led to an increase in the national unemployment rate from 4.1% to 4.2%. The disappointing job figures have sparked discussions among analysts regarding the potential influences of US tariffs and the recent decision by the Federal Reserve to maintain interest rates. The Fed’s choice drew criticism from Donald Trump and several Republican legislators, who argue it could hinder economic growth.

Throughout the week, oil traders have been closely monitoring the implications of impending US tariffs. These tariffs, which range from 10% to 41%, are set to impact US imports from various countries, including Canada, India, and Taiwan, starting next Friday. Trump signed an executive order on Thursday to enforce these tariffs on nations that did not reach trade agreements by his August 1 deadline.

In the liquefied natural gas (LNG) market, prices saw a slight increase following two weeks of declines, driven by geopolitical uncertainties, including US threats of sanctions against energy producer Russia. The average LNG price for September delivery into Northeast Asia was reported at $12.10 per million British thermal units (mmBtu), up from $11.90 per mmBtu the previous week. Analysts noted that geopolitical factors, particularly the potential sanctions on offtakers of Russian oil and gas, could tighten the market if LNG is diverted elsewhere.

The situation remains fluid, with concerns also arising from supply tightness linked to maintenance activities in Italy’s Rovigo and increased procurement efforts from Egypt. These factors may introduce additional upward pressure on prices in the coming weeks, making the oil and gas markets particularly volatile.

As developments unfold, industry stakeholders will continue to assess the impact of these economic indicators and geopolitical risks on global energy prices.