Aug. 4 (UPI) — OPEC production concerns were balanced by strong labor figures from the United States, the world’s largest economy, leaving oil prices flat early Friday.
The U.S. Labor Department reported non-farm payrolls increased by 209,000 last month and hourly earnings in the same broad sector increased 9 cents to $26.36.
“Over the year, average hourly earnings have risen by 65 cents, or 2.5 percent,” the report read. That’s greater than the rate of U.S. inflation as measured in a report this week from the Organization of Economic Cooperation and Development.
Private payroll processor ADP earlier this week reported private sector employment increased from June to July by 178,000, with the services sector far outpacing manufacturing.
U.S. inflation, however, is below a target rate of 2 percent. Among other metrics gauged by the Labor Department, labor force participation, the average workweek and the number of discouraged worked, those who gave up on finding a job, remained relatively unchanged.
Demand had been a driving force in a late July rally in crude oil prices. On the supply side, a report Friday from S&P Global Platts found production strains from Iraq, Libya and Nigeria would undermine broader efforts from the Organization of Petroleum Exporting Countries to balance a market with an output ceiling.
Crude oil prices were moving in volatile territory in early Friday trading, but trended mostly lower in overnight trading. The price for Brent crude oil was down 0.08 percent at 9:15 a.m. EDT to $51.97 per barrel. West Texas Intermediate, the U.S. benchmark for the price of oil, was up 0.06 percent to $49.06 per barrel.
Vandana Hari, an industry analyst for Vanda Insights, said in an emailed newsletter that deeper cuts from OPEC may be necessary to drive the price of oil much higher, but that’s unlikely without support from Libya and Nigeria, two OPEC members exempt from the agreement because of national security issues.
“The emphasis has turned to ensuring full discipline, something that will need a lot of effort for relatively small immediate gains,” she said. “OPEC wants to achieve compliance through monitoring members’ exports, which is neither easy nor fail-safe.”
The price of oil will be influenced later in the day when drilling services company Baker Hughes issues data on exploration and production, which is reported as rig counts. An increase in rig counts from last week could spook traders as it would indicate the possibility for future growth in U.S. shale, where production gains have contributed to supply-side strains.
A survey from the Federal Reserve Bank of Dallas noted that Texas rig counts more than tripled from last year, but said the pace of increase might not be sustainable and could drop off in the second half of the year.