Oil Prices Drop $2 on OPEC+ Supply Concerns and Weak US Jobs Data

Oil prices fell by $2 a barrel on Friday, reflecting growing concerns about potential production increases by OPEC+ and disappointing employment figures from the United States. Brent crude futures settled at $69.67 per barrel, marking a decline of $2.03, or 2.83%. Meanwhile, US West Texas Intermediate crude closed at $67.33 per barrel, down $1.93, equivalent to 2.79%.

Despite Friday’s losses, both Brent and WTI finished the week with notable gains, rising nearly 6% and 6.29% respectively. Analysts from the Al Attiyah Foundation reported that OPEC members and allied producers could potentially agree to increase production by 548,000 barrels per day starting in September during a meeting scheduled for Sunday.

US Jobs Report Weighs on Demand Outlook

The US Labor Department’s latest report indicated that the nation added only 73,000 jobs in July, falling short of economist predictions. This slowdown raised the national unemployment rate slightly to 4.2%, up from 4.1% in June. Analysts attribute the weaker job growth to a combination of factors, including recent tariffs and the Federal Reserve’s decision to maintain interest rates.

On Wednesday, the Federal Reserve voted to keep interest rates unchanged, a move that faced criticism from former President Donald Trump and several Republican lawmakers. As oil traders assessed the implications of the jobs report, attention turned to the looming impact of US tariffs, which are set to take effect next Friday. Trump’s executive order, signed on Thursday, imposes tariffs between 10% and 41% on imports from various countries that failed to negotiate trade agreements by the August 1 deadline.

Geopolitical Factors and LNG Prices

In the liquefied natural gas (LNG) market, Asian spot prices increased slightly following two weeks of decline. The average LNG price for September delivery into Northeast Asia rose to $12.10 per million British thermal units (mmBtu), up from $11.90 per mmBtu the previous week. Geopolitical tensions, particularly US threats of sanctions against Russia, have added pressure to the market, with potential sanctions on buyers of Russian oil and gas looming unless progress is made regarding the ongoing conflict in Ukraine.

“The geopolitical landscape is unpredictable, and any sanctions could tighten the market further,” noted one analyst.

Moreover, supply tightness from maintenance at Italy’s Rovigo facility and increased procurement activities in Egypt may pose additional upward pressure on prices. As the energy market responds to these evolving dynamics, traders remain vigilant about the potential consequences of both domestic and international developments.