Crude oil prices began the week with gains as traders took a break after the latest selloff and as a weather system in the Gulf of Mexico could become a hurricane before it makes landfall.
In midmorning trade in Asia Brent crude had added over 1% from last Friday's close and West Texas Intermediate was up by some 1.30% from last week. The benchmarks lost some 10% last week in a selloff that Bloomberg dubbed "brutal".
"Crude oil recorded its biggest weekly fall in 11 months amid a darkening economic backdrop. Weak jobs data in the U.S. on Friday raised concerns over flagging oil demand in the world's biggest consumer," ANZ analysts said in a note cited by Reuters.
The latest jobs report from the Labor Department, released on Friday, showed 142,000 new jobs were added in August, which was below expectations. However, unemployment rose less than forecast in the same month, keeping optimism alive about an interest rate cut soon.
"OPEC+'s announcement to delay the start of its planned output increase signals that the producers' group remains focused on balancing the market," Morgan Stanley analysts said in a note quoted by Bloomberg. "Unless demand weakens more, we estimate Brent likely remains anchored around the mid-$70s."
It is worth noting that the selloff last week did not pause even after OPEC signaled it would not, after all, start returning supply to the market from October and even after the EIA reported yet another sizable draw in crude oil inventories for the last week of August.
This week, three reports will move prices, including OPEC's and the International Energy Agency's latest monthly market updates. The Energy Information Administration is also scheduled to release its Short-Term Energy Outlook this week. OPEC and the EIA will release their reports on Tuesday. The IEA's Oil Market Report is due out on Thursday.
By Irina Slav for Oilprice.com
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More