WASHINGTON—Oil prices rose again last week, a sixth weekly gain, boosted by an unexpected decline in the U.S. jobless rate, and the prospect that the Organization of the Petroleum Exporting Countries (OPEC+) will come to a decision to extend record production cuts.
“OPEC and the U.S. jobless drop boosted the market,” Phil Flynn, senior analyst at Price Futures Group in Chicago, told Reuters. “If we see jet fuel demand recover, that may give us hope that we can look ahead to a day where these supplies can dwindle down,” said Flynn, pointing to American Airlines Group Inc.’s announcement Thursday that it would increase U.S. flights in July.
Brent crude futures last week rose to a three-month high, in a range more comfortable for producers like Russia. The contract has more than doubled since crashing as low as $15.98 a barrel on April 22. West Texas Intermediate crude is up 11%.
The U.S. Labor Department reported the fall in the jobless rate to 13.3% in May, down from 14.7% in April. The increase in jobs indicates more people will be commuting as the country begins to reopen, creating positive signs for oil refiners and fuel retailers alike.
Both Saudia Arabia and Russia had agreed to extend cuts in production until the end of July, further helping the supply and demand issues facing the world. In addition, tropical storm Cristobal’s influence along Louisiana’s refinery row may also support a curb to the supply and demand problems of oil producers. However, if OPEC+ fails to agree to roll over the output curbs, the cut could drop back to 7.7 million barrels per day from July through December as previously agreed.