The Oil Market Gains As Demand Concerns Are Raised By The US Jobs Report

As can be seen below, oil's rally has been stifled after a report was released showing that the number of jobs available in the US has fallen to the lowest level since 2021, resurging concerns about a global recession.

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A barrel of West Texas Intermediate is trading around $80 a barrel after edging lower earlier today. As a result of the dropping crude production by over a million barrels a day by the Organization of Petroleum Exporting Countries and its allies before last week's US economic report, the price of crude had continued to climb. 

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It may be exaggerated, however, that prices jumped in response to the surprise cut Monday, especially if the rise doesn't coincide with an increase in demand, according to Dennis Kissler, senior vice president of trading at BOK Financial Securities, when it comes to the prices jump after Monday's surprise cut. There was a similar ambivalence reflected in Wall Street's mixed reaction. 

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According to Goldman Sachs Group Inc., uber-bull market analysts raised their price projections following the decision, whereas Citigroup Inc., JPMorgan Chase & Co., and Bank of America Corp. Despite Morgan Stanley's unchanged price forecasts, it even lowered its outlook, citing that China has not kept up with expectations.

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As a result of the end of restrictive Covid policies, crude has gone up by about 20% since mid-March. At first, Chinese demand was believed to pick up, which led to a rise in crude prices. With the unexpected decision of OPEC+, markets rallied the most in almost a year, as a result of the move. This is a punishment for speculators who were betting that oil prices would fall, which was the reason for the rally.

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Despite the concern that the production cuts will reinvigorate inflation, US Treasury Secretary Janet Yellen has criticized the group's decision as "unconstructive." On the economic front, there are concerns about the cuts reinvigorating inflation. As a result, Biden downplayed the matter in a statement late on Monday, saying that it is unlikely to have as bad an impact as the government had feared.