Oil tumbles 3% as upbeat US employment data prompt rate-hike concern, recession fret
by SOURAV D | VIEW 334
On Friday, both US WTI (West Texas Intermediate) and UK crude oil futures’ prices had tumbled to a nearly three-week low, as an upbeat employment report from the US Labour Department had prompted rate-hike concerns and feathered up recession frets further. Earlier in the day, US Labour Department data had unfurled that the US nonfarm rose more than anticipated, as US employers had created 517,000 jobs last month, while average hourly earnings rose by 0.3 per cent in January, eventually causing concerns that the US Fed might rise its benchmark borrowing costs again at the March policy meet, which could push the US economy down to a recession territory and could yield a caustic demand-crunch.
Oil falls over 3 per cent after upbeat US job report
Citing statistics, in the day’s commodity market wind-down, the UK crude futures’ prices fell as much as 2.7 per cent to $79.94 per barrel after hitting a session-high of $84.20 a barrel earlier in the day, while US WTI (West Texas Intermediate) crude oil futures’ prices closed 3.3 per cent lower to $73.39 a barrel following a number of wild swings between $78.01 and $73.13.
Over the week, the US WTI crude oil futures’ prices declined 7.9 per cent, while UK crude oil contracts’ prices fell 7.8 per cent. Meanwhile, citing that the latest set of data had been stemming concerns among market participants that the US Fed might return to its aggressive rate-hike policy and push the US economy closer to a recession territory in a near-future, an analyst at Price Futures’ Group, Phil Flynn said, “The market can't decide whether it should be nervous about a recession or more worried about the Federal Reserve being aggressive with interest rates”.