Jakarta,- Compact crude oil prices opened lower in early trading today, after the release of United States (US) employment data that did not meet market expectations to ease geopolitical conflicts.

At the opening of trading today Monday (6/5/2024), the price of WTI crude oil opened 0.06% corrected at US $ 78.06 per barrel, as well as the price of Brent crude oil opened lower or down 0.08% at US $ 82.89 per barrel.

While on Friday trading (3/5/2024), the price of WTI crude oil closed down 1.06% at US$78.11 per barrel, as well as the price of Brent crude oil fell 0.85% to US$82.96 per barrel.

Oil prices ended lower on Friday, and posted the steepest weekly decline in three months as investors weighed weak US jobs data and the likely timing of a Federal Reserve (Fed) interest rate cut.

Investors are concerned that higher borrowing costs for a longer period of time will hamper economic growth in the US, the world's largest oil consumer, after the Fed decided this week to keep interest rates steady.

US employment growth slowed more than expected in April and annual wage gains declined. The US economy added jobs at a slower rate in April of 175,000 jobs, lower compared with 315,000 in March.

The unemployment rate also increased to 3.9% in April, up from 3.8% in the previous month, but this is still the 27th consecutive month that the unemployment rate has been below 4%. The important average hourly earnings growth slowed to 0.2% in the month.

“The economy is slowing a bit,” said Tim Snyder, economist at Matador Economics. “But (the data) provide a path forward for the Fed to make at least one rate cut this year,” he added.

The Fed held rates steady this week and flagged high inflation numbers that could delay a rate cut. Higher interest rates usually weigh on the economy and can reduce oil demand.

The market factored in the estimated timing of a possible rate cut after the release of weaker-than-expected monthly jobs data.

U.S. energy companies last week cut the number of operating oil and natural gas rigs for a second straight week, to the lowest level since January 2022, Baker Hughes reported on Friday.

The oil and gas rig count, which is an early indicator of future production, fell eight to 605 in the week ended May 3, the largest weekly decline since September 2023. The oil rig count fell seven to 499 on the week, the largest weekly decline since November 2023.

The geopolitical risk premium due to the Israel-Hamas war has faded as both sides consider a temporary ceasefire and hold talks with international mediators.

Furthermore, the next meeting of OPEC+ oil producers, members of the Organization of the Petroleum Exporting Countries and its allies including Russia will be set for June 1.

Three sources from the OPEC+ group said they may extend voluntary oil production cuts beyond June if oil demand does not pick up.

Money managers cut their net long US crude oil futures and options positions in the week to April 30, according to the US Commodity Futures Trading Commission (CFTC).