Crude Oil Weakens After Payrolls on Renewed Growth Fears

By Peter Nurse -- Oil prices retreated Friday after a blockbuster July U.S. jobs report raised expectations of continued aggressive monetary tightening by the Federal Reserve, potentially weighing on growth in the world’s largest consumer of crude.

By 9:25 AM ET (1325 GMT), U.S. crude futures traded 1.5% lower at $87.25 a barrel, while the Brent contract fell .21% to $93.02.

U.S. Gasoline RBOB Futures were down 0.7% at $2.7729 a gallon.

U.S. job growth unexpectedly accelerated in July, with nonfarm payrolls rising by 528,000 during the month versus the revised figure of 398,000 in June.

Analysts had expected the reading to slide to 250,000 as soaring price inflation and surging interest rates were seen hitting labor demand in the world's largest economy.

Strong employment trends are encouraging signs for central bankers, and something the Federal Reserve is closely watching as it moves into its next meeting in September.

Analysts in recent days have been weighing the odds that the Fed will start to ease off the aggressive 0.75-point hikes it has made in June and July given the latest GDP figures pointed to the U.S. economy entering a technical recession, but this release suggests that the U.S. central bank will continue its path of severe tightening.

The sharp rise in payrolls has also translated into a jump in the U.S. dollar, with the U.S. dollar index climbing over 1% to 106.670.

This also weighs on the oil market as a strong buck makes the commodity, which is priced in dollars, more expensive for customers in foreign countries.

The oil market had already looked weak before the jobs report, with crude prices falling to a new seven-month low overnight as the Bank of England’s forecast of a prolonged U.K. recession triggered a broader risk-off moment in global markets, specifically leading to the apparent capitulation of numerous oil bulls. 

CFTC data, which run through Tuesday, may shed light on how positioning was going into that selloff when they are released later in the session.

Still, while the oil market may have given up all the gains made in the wake of Russia’s invasion of Ukraine, it’s important to point out that global supply remains very tight.

The Organization of Petroleum Exporting Countries and allies, known as OPEC+, could only agree to add 100,000 barrels a day in September at Wednesday’s meeting, and there remain doubts whether many of the group can actually follow through with their promises.

Additionally, while talks are due to resume on reviving the Iran nuclear deal that could lead to sanctions being lifted on the Islamic Republic, allowing it to resume exporting oil onto the global market, actual progress remains very hard to agree upon.

Begin trading today! Create an account by completing our form

Privacy Notice

At One Financial Markets we are committed to safeguarding your privacy.

Please see our Privacy Policy for details about what information is collected from you and why it is collected. We do not sell your information or use it other than as described in the Policy.

Please note that it is in our legitimate business interest to send you certain marketing emails from time to time. However, if you would prefer not to receive these you can opt-out by ticking the box below.

Alternatively, you can use the unsubscribe link at the bottom of the Demo account confirmation email or any subsequent emails we send.

By completing the form and downloading the platform you agree with the use of your personal information as detailed in the Policy.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.7% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Back to top

Office network
  • London Office
    One Financial Markets 

    1 Finsbury Market
    EC2A 2BN
    United Kingdom

    T:  + 44 ( 0 ) 203 857 2000
  • Dubai Office
    One Financial Markets 
    OT19-39 Central Park Tower
    Dubai International Finance Centre
    United Arab Emirates
    T: + 971 44 22 888

One Financial Markets is the trading name of Axi Financial Services (UK) Ltd, a company registered in England with company number 6050593. Axi Financial Services (UK) Ltd is authorised and regulated by the Financial Conduct Authority in the UK (under firm reference number 466201) and the Financial Sector Conduct Authority in South Africa (with FSP number 45784).

The information on this site is not directed at residents of the United States, Belgium, Poland or any particular country outside the UK and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. is owned and operated by Axi Financial Services (UK) Ltd.

Award winning broker
We have been presented with a number of awards that recognise the quality of our service and dedication to our clients :

Best FSA Regulated Broker
Saudi Money Expo

Best Education Product
Saudi Money Expo

Best Broker - Online Trading
IAIR Awards

Best Institutional Broker
Saudi Money Expo

Best FX Services Broker
CN Forex

Top International
FX Broker 2015

Saudi Money Expo

Broker of the Year
Online Trading – Middle East

IAIR Awards

Best Forex
Customer Service 2018

JFEX Awards

We accept the following payment methods: