Growing economic concerns in the US weigh on Brent’s price

The front-month ICE Brent contract has lost $1.00/bbl on the day from Friday, to trade at $71.74/bbl at 09.00 GMT.

PHOTO: Oil barrels and pump jack along with the flag of US. Getty Images

Upward pressure:

Brent’s price found some support following OPEC’s latest announcement to extend the ongoing 2.2 million b/d oil production cuts for two months.

Last week, eight members of the Organization of the Petroleum Exporting Countries (OPEC) and its allies collectively decided to postpone the gradual easing of production cuts that were planned to begin in October.

Oil’s selloff was “briefly halted by the announcement that OPEC would postpone its production hikes by two months,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

In eastern Europe, supply disruption concerns have continued over the weekend, adding some upward pressure on Brent’s price. A series of fires broke out at a fuel depot in Volokonovsky district in Russia's Belgorod region yesterday, its Governor Vyacheslav Gladkov confirmed.

The fire was caused by falling drone debris launched by the Ukrainian armed forces, Gladkov claimed.

Downward pressure:

Brent’s price trailed lower as economic activity in the US continued to show signs of weakness, market analysts said.

Concerns about sluggish economic growth in the US grew after the country's Bureau of Labor Statistics (BLS) published a weaker-than-expected US jobs report on Friday. US employers added 142,000 jobs in August, according to the report.

Oil market analysts were expecting the report to show a much larger growth of 161,000 additional US jobs, according to SPI Asset Management’s managing partner Stephen Innes.

This news has raised demand growth concerns in the US and put downward pressure on Brent’s price. “Demand weakness and a soft oil balance in 2025 are still clearly a concern,” two analysts from ING Bank said.

By Aparupa Mazumder

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