The crude oil market fell by 2 per cent on Friday due to the possible increase in production by the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) amid worries over demand due to a weaker-than-expected US jobs report.
Brent crude was down to $69.67 a barrel after losing $2.03 or 2.83 per cent, and the US West Texas Intermediate (WTI) crude finished at $67.33 a barrel after declining by $1.93 or 2.79 per cent.
However, Brent finished the week with a gain of nearly 6 per cent, while WTI rose 6.29 per cent.
Pressure came in the oil market as OPEC members and allied producers plans to reach an agreement as early as Sunday to boost production by 548,000 barrels per day in September.
Reuters also reported that discussions on volume were ongoing and the hike could be smaller.
If the agreement is reached, it would effectively fast-track the return of 2.2 million barrels per day in voluntary cuts a year ahead of schedule.
OPEC’s Joint Ministerial Monitoring Committee (JMMC) already met last week and stopped short of recommending any fresh changes to quotas.
However, the committee is not saddled with that responsibility, which is that of the full ministerial gathering this Sunday, to formalize the next move.
Market analysts also warned that tot every hike makes it into real barrels as plans by the group to reclaim market share would need to be balanced against fragile prices and persistent underperformance from several member states.
The US Labor Department said the country added 73,000 jobs in July, raising the national unemployment rate to 4.2 per cent from 4.1 per cent.
This followed decision by the US Federal Reserve to keep interest rates unchanged, drawing criticism from President Trump.
President Trump also signed an executive order on Thursday imposing tariffs ranging from 10 per cent to 41 per cent on US imports from dozens of countries and foreign territories that failed to reach trade deals by his August 1 deadline.
The European Union, South Korea, Japan, and Great Britain all reached deals with the US.
The US State Department stated it would impose sanctions on 20 entities it suspects of trading Iranian oil and petrochemical products, including the Chinese oil terminal Zhoushan Jinrun, the fourth port facility in China to be directly targeted by the US.
India’s state-controlled refiners have stopped buying Russian oil as discounts narrowed to just -$1 per barrel to Dubai, further disincentivized by Mr Trump’s announced 25 per cent tariff on India if the country continues its purchases of Russian crude.