Oil tumbles amid weak US jobs data and demand concerns

Crude oil had the biggest drop in 11 months as a weak US jobs report accelerated speculation that demand in the world's biggest crude oil consumer would be timid.

West Texas Intermediate fell 2.1 per cent to settle at $67.67 a barrel, wrapping up the biggest weekly decline since October 2023. While the US jobs data released Friday increased wagers that the Fed will approve a super-sized interest rate cut, it also perpetuated the view of slowing oil demand that has weighed on crude for weeks.

“The market is still on tenterhooks evaluating the strength of the global economy and what the Fed will do,” said Rebecca Babin, senior energy trader at CIBC Private Wealth.

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Recent efforts to choke supplies haven't stemmed crude's slide. While the OPEC+ alliance this week abandoned a proposal to increase production by 180,000 barrels a day in October and November, a longer-term plan to revive 2.2 million barrels a day over the course of a year remained in place, with the completion date pushed back two months to December 2025.

Brent futures have been in a downtrend since early July, with weakness in the economies of top oil consumers China and the US fuelling fears about demand, while crude production in the world's largest economy has also steadily risen in recent years, adding supply pressure to global balances.

That means that even the OPEC+ delay and an almost 7 million-barrel weekly drop in US crude inventories have managed to do very little in terms of pushing up oil prices. The monthly market outlooks of OPEC, the Energy Information Administration, and the International Energy Agency will be closely watched next week.

“We see the OPEC+ unwind delay, ongoing geopolitics and financial positioning providing price support at $70 to $72 Brent,” Citigroup Inc. analysts including Eric Lee said in a note. The bank said it sees “moves down to the $60 range in 2025 as a sizable market surplus emerges.”