Oil futures: Crude resumes slide on muted Iran response, US jobs data
Quantum Commodity Intelligence – Crude oil futures Friday were again in sharp retreat following a volatile pricing week as traders watched for developments in the Middle East.
Front-month Oct24 ICE Brent futures were trading at $77.24/b (1605 GMT), compared to the day's range of $76.64-$80.46/b and Thursday's settle of $79.52/b, leaving benchmarks lower for a fourth consecutive week.
At the same time Sep24 NYMEX WTI was trading at $73.83/b versus Thursday's settle of $76.31/b, as benchmarks posted fresh two-month lows.
Prices slumped from intraday highs with no immediate escalation in the Middle East, which some analysts see as a sign that international diplomacy efforts could be working.
Markets took a further downwards turn amid weak US jobs data, with Nonfarm payrolls growing by modest 114,000 in July, versus the Dow Jones poll forecast for 185,000 new positions.
Crude had tumbled at the start of the week on fears over slowing demand growth but spiked higher after the assassination of a top Hamas figure in Tehran on Wednesday.
Iran has vowed to respond to the suspected Israeli strike, prompting a rise in the so-called risk premium, although so far, there is no immediate threat to oil supplies in the wider region.
Prices reversed late Thursday as profit-taking kicked in, while the OPEC+ JMCC meeting indicated an unwinding of cuts is still on course to start from October.
"Investors are weighing OPEC+'s decision to maintain its current output policy against concerns of potential escalation in the Middle East following the killing of a Hamas leader in Iran," said Saxo in its Friday client note.
Unwinding
However, analysts noted that the OPEC comments following the JMCC left the door open to defer the unwinding timetable while also emphasising a tightening on compliance.
The statement highlighted assurances from Iraq, Kazakhstan, and Russia to achieve "full conformity" and welcomed their recent submission to the OPEC Secretariat of their compensation plans for the overproduced volumes since January 2024.
"This was an important part of the JMMC meeting - compensation cuts and the assurance of full conformity to comply by the three member state," said Giovanni Staunovo of UBS.
The compensation period will run over 15 months from July 2024 to September 2025 and will be in addition to OPEC+ cuts in any given month. The group is set to begin unwinding some output curbs in October of this year.
Last Friday, Sep24 Brent futures closed at $81.13/b, while Sep24 WTI settled at $77.16/b.
