Oil futures settled higher Friday after the U.S. jobless rate hit a six-year low. Traders were keeping an eye on an uptick in tensions in Ukraine, as oil has suffered through a withering week, largely driven by the Organization of Petroleum Exporting Countries’s move to cut its forecast for oil demand, and Saudi Arabia’s decision to cut oil prices sold to the U.S.
Light, sweet crude for December delivery rose 74 cents, or 1%, to settle at $78.65 a barrel on the New York Mercantile Exchange. On the week, however, prices declined 2.4%. It was New York-traded oil sixth straight weekly loss. December Brent futures rose 53 cents, or 0.6%, to $83.39 a barrel on London’s ICE. On the week, Brent fell 2.9%. It was Brent’s seventh consecutive weekly decline.
The jobs data pointed to U.S. economic growth, which in turn stoked hopes of more demand for oil. The U.S. unemployment rate fell to 5.8%. Earlier Friday, there were unconfirmed reports that a Russian military convoy had crossed the border with Ukraine. Ukraine’s military said a convoy of 32 tanks, 16 cannons and 30 trucks bearing troops and equipment had entered the country from Russia, according to news services. There was no independent confirmation.
Oil futures notched multi-year lows earlier in the week after news Saudi Arabia, the world’s No. 1 oil exporter, had cut prices for its oil sold to the U.S. That was seen as an indication that the Saudis are more concerned with preserving their market share than cutting down production to put a floor on prices.
Oil has lost nearly 30% since a peak in June, amid concerns about the health of the global economy and plentiful supplies. A stronger dollar, buoyed by U.S. economic data that generally has been more positive than economic gauges from Asia and Europe, has also weighed on oil.
The Organization of the Petroleum Exporting Countries expects its crude production to fall by 1.8 million barrels a day by the end of 2017 to 28.2 million barrels a day, OPEC said in its annual outlook report released Thursday.
The dominant theme in oil markets is the subject of OPEC cutting its oil supply from its current ceiling of 30 million barrels a day. Some officials have said that oil prices will have to drop further to $70 a barrel for the cartel to take action, according to The Wall Street Journal. This may mean the 12-member cartel, which produces more than a third of the world’s oil supply, may not cut production at its Nov. 27 meeting in Vienna, but could be forced to do so in following months if prices continue to slide, traders have said.