Reuters: Oil prices tread water as market eyes global risks

09:00, 08 July 2019
Economy
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REUTERS

Brent crude futures were down 3 cents by 0300 GMT at $64.20. U.S. West Texas Intermediate (WTI) was up 6 cents at $57.57 a barrel, Reuters said.

"A very cautious open this morning supported by a better than expected (non-farm payrolls)," said Stephen Innes, managing partner at Vanguard Markets in Bangkok. "Traders remain incredibly cautious about the dimmer global economic overhang."

Read alsoReuters: OPEC extends oil cut to prop up prices as economy weakens

Both oil benchmarks fell last week as concerns about a slowing global economy outweighed risks to supply. Brent fell more than 3% and WTI shed more than 1.5%.

U.S. job growth rebounded strongly in June, with government payrolls surging, the Labor Department's closely watched employment report showed on Friday, suggesting May's sharp slowdown in hiring was probably a one-off.

Employers added 224,000 jobs last month, the most in five months, the report showed.

But the U.S.-China trade war has dampened prospects of global economic growth and oil demand.

The lack of concrete progress in resolving the acrimonious trade war between the United States and China, however, means the bar could be very high for the U.S. Federal Reserve not to lower borrowing costs at its July 30-31 policy meeting.

Oil received some support from simmering tensions over Iran and after an extension last week to output cuts by OPEC and its allies.

Iran said on Sunday it will shortly boost its uranium enrichment above a cap set by a landmark 2015 nuclear deal, prompting a warning 'to be careful' from U.S. President Donald Trump, who pulled out of the pact last year.

Meanwhile, U.S. energy companies this week reduced the number of oil rigs operating for the first time in three weeks as drillers follow through on plans to cut spending this year.

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