By Nicole Jao
(Reuters) – Oil prices edged higher in early trading on Friday as investors weighed in on a sharp drawdown in U.S. crude inventories and a delay in output increases by OPEC+ producers amid mixed U.S. jobs data.
Brent crude futures rose 19 cents, or 0.26%, to $72.88 by 0010 GMT, and U.S. West Texas Intermediate crude futures rose 22 cents, or 0.32%, to $69.37.
“Crude oil edged higher as bullish signals offset the bearish sentiment that has gripped the market in recent days,” ANZ analyst Daniel Hynes said, adding that a weaker dollar was also supporting commodity prices.
Brent fell one cent to its lowest closing level since June 2023 on Thursday and WTI fell 5 cents to its lowest closing level since December 2023 after data showed U.S. crude inventories fell to their lowest level in a year last week. [EIA/S]
Crude inventories fell by 6.9 million barrels to 418.3 million barrels last week, compared with analysts’ expectations for a reduction of 993,000 barrels in a Reuters poll.
OPEC+ also agreed to postpone an oil production increase planned for October and November, also boosting prices, the producer group said on Thursday, adding it could suspend or further reverse the increases if needed.
The latest U.S. economic data provided some relief about the health of the economy to a market looking for clues about the Federal Reserve’s interest rate-cutting path.
U.S. service sector activity was flat in August, but job gains slowed, consistent with an easing labor market.
Mixed signals from labor market indicators weighed on the dollar, which fell near a one-week low ahead of crucial monthly payroll data due later Friday.
A weaker dollar makes oil cheaper for buyers using other currencies.
(Reporting by Nicole Jao in New York; Editing by Sonali Paul)
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