Oil Pares Weekly Decline as Dollar Slumps After Payrolls Data

Oil pared its weekly decline as traders scaled back expectations for Federal Reserve interest-rate hikes after a mixed US jobs report.

(Bloomberg) — Oil pared its weekly decline as traders scaled back expectations for Federal Reserve interest-rate hikes after a mixed US jobs report.

West Texas Intermediate traded little changed near $76 a barrel, almost 5% lower than a week earlier. While US figures showed a higher-than-expected unemployment rate, there was also a bigger payrolls increase than anticipated. Traders downgraded the chances of a 50-basis-point hike this month and the dollar dropped, making commodities priced in the currency more attractive.

See also: Fed Picture Muddied by Mixed Data on Jobs, Wage Growth: TOPLive

For much of this week, bearish sentiment around more rate increases has overshadowed optimism over China’s recovery. The country’s revival is already raising the cost of shipping crude, while Shell Plc sees higher oil prices in the coming months as China underpins strong global demand.

The market has had a bumpy year so far, whipsawed by the opposing drivers of slowdown concerns and China’s rebound. Traders are also monitoring energy flows from Russia, with indications that the nation’s exports are proving more resilient than initially expected, even in the face of sanctions.

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