Oil prices ended lower on Friday following steep losses in stocks on mixed unemployment data but posted their second consecutive weekly gain.
West Texas Intermediate Futures ended 75 cents or 1.5% lower at $46.01 a barrel on the New York Mercantile Exchange rising 1.5% for the week.
Brent Futures, the global benchmark, slipped $1.07 or 2.1% to $49.61 a barrel on the London based ICE Futures Exchange losing 0.9% for the week.
“Oil has been locked in with the equity market for the last couple of days, so there’s likely to be further pressured here,” Tariq Zahir, managing member of Tyche Capital Advisors, told the Wall Street Journal.
The prices turned steeply lower in morning data after monthly unemployment data by the Department of Labor showed that nonfarm payrolls had grown less than expected in the month of August and a decline in the unemployment rate for the same period.
The data was expected by most analysts to give a clear indication on the timing of the Federal Reserve’s first interest rate hike in more than a decade ahead of the Fed’s two day policy meeting later this month.
Losses were however pared by a report by oilfield services provider Baker Hughes who showed a decline in the number of oil rigs for the first time in seven weeks.
The number of oil rigs in the US fell by 13 last week as the latest round of cutbacks by oil firms following multi year low oil prices started to gain traction.
The decline brings the total number of active rigs at the end of the week ending on September 4 to 662, the lowest since mid July.
Most analysts however expect oil prices to remain at their low levels for longer with analysts at banks, Barclays, Commmerzbank and BNP Paribas cutting their short term forecast for oil prices.
“ Oversupply will remain in the market for longer than expected,” Carsten Fritsch, Commerzbank senior oil and commodities analyst, told Reuters Global Oil Forum after announcing the reduction.
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