Oil prices mixed before the U.S. jobs report

Oil prices were mixed on Friday following a substantial increase in the previous session on a lower dollar and a drop in U.S. crude stocks. They were established for modest weekly profits ahead of a highly expected U.S. monthly jobs report. 

Brent crude futures were higher 13 cents, or 0.2%, to $73.16 per barrel at 0619 GMT, while U.S. West Texas Intermediate (WTI) crude futures were under 4 cents, or 0.1%, at $69.95 per barrel.

Both benchmark oil contracts surged 2% on Thursday, placing WTI on track to rise 1.8% for the week, while Brent directed for a 0.6% weekly gain.

The move down in WTI was expected due to traders squaring positions before the U.S. non-farm payrolls report for August. According to Stephen Innes, managing partner at SPI Asset Management, on concerns, the report may be lower than consensus estimates.

Nevertheless, some analysts view further oil price gains amid tightening crude supplies and hints of recovering fuel demand.

U.S. stockpiles proceed to decline

According to Edward Moya, senior market analyst at OANDA, with an oil market still firmly in a shortfall for the rest of the year, oil seems poised to rally further as OPEC+ signals control in reducing cuts and as U.S. stockpiles proceed to fail.

This week’s development has also come between a weakening U.S. dollar, which makes oil more affordable in other currencies, and the fallout from Hurricane Ida.

According to Vandana Hari, energy analyst at Vanda (NASDAQ: VNDA) Insights, the prolonged U.S. Gulf production and Louisiana refining capacity interruptions, which are bound to create a giant hole in the previously reduced U.S. oil stockpiles, as well as data recording, continued substantial domestic fuel demand improvement are supportive factors.

Around 1.7 million barrels per day of oil production continues closed in the U.S. Gulf of Mexico, with harm to heliports and fuel depots reducing crews’ return to offshore platforms, sources informed Reuters.

Offsetting the supply impact, oil demand has been restricted as extended power outages are reducing the reopening of closed refineries in Louisiana.

Demand is expected to focus following the Organization of the Petroleum Exporting Countries and partners, together named OPEC+, this week held to their plan to add 400,00 barrels per day (bpd) back to the market across the next few months amid rising coronavirus cases, analysts stated.