New York Crude Oil Hits 7-Month Low... "US Employment Worse Than Expected"

Concerns Over Economic Slowdown Suppress Oil Prices

International oil prices fell for the fourth consecutive trading day, marking the lowest level since the beginning of the year. As geopolitical tensions in the Middle East ease, and U.S. employment data came out worse than expected, concerns about an economic slowdown grew, pressuring oil prices.

On the 21st (local time) at the New York Mercantile Exchange, the near-month September delivery West Texas Intermediate (WTI) crude oil closed at $71.93 per barrel, down 1.69% from the previous trading day. This is the lowest price in seven months since January 10 ($71.37).

The global benchmark Brent crude oil for October delivery closed at $76.05 per barrel, down 1.49% from the previous session. This is the lowest price since January 2 ($75.89). International oil prices have been declining for four consecutive trading days since the 16th.

The reason for the over 1% drop in international oil prices on this day was largely due to indicators showing that U.S. job growth was much slower than expected. The U.S. Department of Labor released revised nonfarm payroll figures for the 12 months up to March. During this period, the number of new nonfarm jobs was revised downward by 818,000 compared to previous figures. This means that new job creation was about 30% less than the initially announced figure of 2.9 million.

As recession fears deepened, the perception that crude oil demand would also decrease spread. Phil Flynn, an analyst at Price Futures Group, said, "The market is now beginning to price in a potential hard landing from a strong economy, and this is why oil prices are being capped."

Although news was announced that U.S. crude oil inventories had decreased on this day, it did not prevent the decline in oil prices. The U.S. Energy Information Administration (EIA) reported that commercial crude oil inventories fell by 4.6 million barrels in the week ending on the 16th. This figure is far below the market forecast of 2.7 million barrels.

The easing of geopolitical tensions in the Middle East has been a factor in the recent decline in oil prices. According to U.S. officials, ceasefire negotiations between Israel and Hamas are expected to resume within this week.

Some expect international oil prices to remain weak for the time being, citing the slowdown in China's economic activity. Snyder of Matador Economics said, "We are currently measuring everything (about oil prices) by the Chinese economy, and if there is anything leaning negatively in China, it will put pressure on energy."