U.S. crude-oil futures on Friday rose slightly, adding to their highest prices in a month, with investors watching for a report on U.S. nonfarm payrolls for August as a possible gauge of demand.
West Texas Intermediate crude for October delivery
on the New York Mercantile Exchange was trading 20 cents, or 0.3%, higher at $70.19 a barrel, after closing up 2% on Thursday and logging the highest settlement for a front-month contract for the U.S. benchmark since Aug. 3, according to Dow Jones Market Data.
Oil futures this week have been supported by data that showing a sharp drop in U.S. crude inventories, even as OPEC and its allies decided Wednesday to stick to a plan to increase oil production by 400,000 barrels a day each month from August.
On Friday, investors will be watching for monthly U.S. job figures from the Labor Department at 8:30 a.m. Eastern Time, which could help measure the recovery phase from COVID-19 amid the emergence of the delta variant.
Economists surveyed by The Wall Street Journal estimate that the U.S. economy added 720,000 jobs in August and that the unemployment rate fell to 5.2% from 5.4%.
Meanwhile, global benchmark November Brent crude
was trading 40 cents, or 0.6%, higher at $73.45 a barrel on ICE Futures Europe.
Markets continue to watch the U.S. Gulf Coast, where the aftermath of Hurricane Ida last weekend has left a swath of carnage and oil refineries in Louisiana shut in. Remnants of the storm also buffeted the U.S.’s Northeast on Thursday, leaving at least 45 people dead.
Optimism around the prospect for further gains for crude prices continues to center on U.S. inventory drawdowns, following the Energy Information Administration report Wednesday that showed that U.S. crude inventories fell by 7.2 million barrels for the week ended Aug. 27.
“Today’s modest rise in oil prices is supported by a favorable macro sentiment, with optimism coming from the reported draw in US crude stocks from last week, the fact that US total products inventories are at the lowest level at this time of year since 2018, while refinery demand in Louisiana continues to recover slowly from the flooding and power outages,” wrote Rystad Energy’s Bjørnar Tonhaugen, head of oil markets, in a daily note.
Tonhaugen said he wouldn’t be surprised to see some selling in the wake of the U.S. jobs report unless it reveals a powerful surprise to the upside.