Oil prices rose today, heading for weekly gains of more than 3% as US jobs data calmed demand concerns and continued fears of a widening conflict in the Middle East. Brent crude futures rose two cents, or 0.03%, to $79.18 a barrel and U.S. West Texas Intermediate crude futures rose ten cents to $76.29 a barrel. Brent and WTI are set to post gains of more than 3% on a weekly basis. China’s consumer price index rose slightly faster than expected last month, rising 0.5 percent from a year earlier in July versus a 0.2 percent rise in June and exceeding the expected 0.3 percent increase in a Reuters poll of economists, data from China’s statistics bureau showed on Friday. Inflation data pushed Chinese stocks higher, although analysts attributed the price rise to weather turbulence that affected food supplies and warned there were few signs of a recovery in consumer demand. Sentiment in the United States improved after data showed the number of Americans filing new applications for unemployment benefits fell more than expected last week, suggesting that fears of a labor market disintegration were exaggerated and eased recession fears. The dollar rose after the jobs data. However, a stronger dollar usually tends to lower oil prices, as buyers using other currencies have to pay more for dollar-denominated crude. In another price support, Libya’s National Oil Corporation declared a force majeure situation at the Sharara oil field as of Wednesday, the company said in an official statement, adding that it had gradually reduced the field’s production due to the protests.
How did US jobs data affect oil price?
Recent US jobs data has significantly impacted oil prices, achieving a significant rise. When the figures were published, the data showed a larger-than-expected decline in jobless claims, indicating a marked strength in the US labor market. This decline reflects that the US economy may be more resilient than previously thought, boosting confidence in economic stability and encouraging investor optimism about increased demand for Energy.The rise in the number of Americans filing for unemployment benefits is an important indicator of the state of the labor market. When the number of such applications decreases, it is understood that the economy may be in good shape and companies continue to hire rather than lay off workers, indicating strong economic activity. This activity could translate into an increase in demand for energy, including oil, as economic growth requires more fuel for transportation and transport operations. Manufacturing.However, the impact of jobs data on oil prices remains a bit complicated. After the release of the data, the US dollar saw a rally, as the strength of the US economy reflects economic stability that may strengthen the value of the currency. However, a stronger dollar could raise the cost of oil for international buyers, which could lead to downward pressure on prices. But in this case, the positive impact of the jobs data on the US economy was clear. All bigger, as improvements in the labor market supported overall market sentiment and contributed to pushing oil prices higher. In conclusion, the US jobs data contributed to pushing oil prices higher by boosting confidence in the economy and increasing expectations of energy demand growth.
Relationship dollar & Oil price & Their influence on market
The relationship between the strength of the dollar and oil prices, where the movement of the US dollar directly affects the oil markets in different ways. Oil trades globally in US dollars, which means that the value of the dollar affects the cost of oil for buyers using other currencies. When the dollar rises, oil becomes more expensive for foreign buyers. This rise in the cost of oil can put pressure on demand, as buyers may turn to looking for cheaper alternatives or reduce their energy consumption. When the dollar is strong, countries that rely on oil imports pay more for the same amount of oil, which could reduce global oil demand. This contraction in demand may cause a drop in prices, as oil markets respond to changes in the oil. Demand and supply.On the other hand, when the dollar is weak, the cost of oil decreases for foreign buyers, which can boost oil demand and lead to higher prices. A weaker dollar makes oil cheaper for countries that use other currencies, which could increase their oil imports and boost global economic activity. This could push oil prices higher, as global demand increases under a weak dollar.In addition, a change in the value of the dollar can affect the expectations of investors and oil markets indirectly. When the dollar rises, investors may see oil as a safe haven from currency fluctuations, which could lead to increased demand for oil as an investment asset. Conversely, when the dollar falls, investors may boost their investments in oil due to the lower cost of purchase, which can lead to an increase in prices.
