Oil Prices Drop as OPEC+ Production Concerns and US Jobs Data Worsen

Oil prices fell by $2 a barrel on Friday, reflecting growing concerns over potential production increases by OPEC+ and disappointing US jobs data that raised fears about demand. Brent crude futures settled at $69.67 a barrel, marking a decrease of $2.03, or 2.83%. Meanwhile, US West Texas Intermediate crude finished at $67.33 a barrel, down $1.93, or 2.79%. Despite this decline, Brent crude recorded a weekly gain of nearly 6%, while WTI rose by 6.29% over the same period.

Analysts from the Al Attiyah Foundation indicated that OPEC members and their allies, collectively known as OPEC+, may agree to increase production by 548,000 barrels per day starting in September. The anticipated agreement could be reached as early as Sunday, adding to market apprehensions.

The situation intensified with the release of the US Labor Department’s report, indicating that the country added only 73,000 jobs in July, significantly below economists’ forecasts. This lackluster performance pushed the national unemployment rate up to 4.2%, compared to 4.1%% the previous month. Analysts have speculated that recent economic challenges may stem from US tariffs or the Federal Reserve’s recent decision to maintain interest rates.

The Federal Reserve’s choice to keep interest rates unchanged drew criticism from several quarters, including former President Donald Trump and a number of Republican legislators. This political backdrop has heightened the focus on oil traders, who have been particularly attentive to upcoming US tariffs that are likely to affect trading partners starting next Friday.

On Thursday, President Trump signed an executive order imposing tariffs ranging from 10% to 41% on imports from numerous countries, including Canada, India, and Taiwan, that did not meet trade deal deadlines by August 1.

Asian spot liquefied natural gas (LNG) prices saw a slight increase after two weeks of declines, driven by geopolitical risks, 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 suggest that the looming sanctions on Russian oil and gas could further tighten the market, particularly if LNG is sourced from alternative suppliers.

Despite these concerns, potential supply tightness may arise from maintenance activities at Italy’s Rovigo terminal and intensified procurement efforts in Egypt. The global energy landscape remains uncertain as geopolitical factors continue to evolve, complicating forecasts for market stability.