Crude Oil Rises Over $1, Logs First Weekly Gain in Three Weeks on Jobs Report and U.S.-China Trade Optimism

Houston: Oil prices climbed more than $1 a barrel on Friday, marking their first weekly gain in three weeks. The rally was fueled by a solid U.S. jobs report and signs of renewed trade dialogue between the United States and China, bolstering hopes for growth in the world’s two largest economies. Brent crude futures settled at $66.47 a barrel, gaining $1.13, or 1.73 per cent, while U.S. West Texas Intermediate (WTI) crude closed at $64.58, up $1.21, or 1.91 per cent. For the week, Brent rose by 2.75 per cent and WTI surged by 4.9 per cent.

“The jobs report was Goldilocks — not too hot, not too cold, just right,” said Phil Flynn, senior analyst at Price Futures Group. “It strengthens the case for a potential interest rate cut by the Federal Reserve.” According to the U.S. Labour Department, the economy added 139,000 jobs in May, while the unemployment rate held steady at 4.2 per cent. While job gains were modest, the data indicated a controlled slowdown in labour demand, rather than a sharp decline. Analysts say a potential rate cut could stimulate economic activity and increase oil demand.

The oil market also reacted positively to news of renewed trade talks between the U.S. and China. Chinese state news agency Xinhua confirmed that the discussions, initiated by Washington, took place on Thursday. President Donald Trump later called the talks “very positive,” noting that relations with China and the trade deal were “in very good shape.” “The market had braced for worse — but OPEC+ didn’t oversupply, and U.S.-China trade talks haven’t collapsed like Musk and Trump’s relationship,” joked John Kilduff, partner at Again Capital.

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On the supply side, OPEC+ announced it would proceed with a planned output increase of 411,000 barrels per day (bpd) in July. The group, which includes the Organisation of the Petroleum Exporting Countries and allies like Russia, rejected Saudi Arabia’s push for a larger hike, sticking to its strategy of gradual market rebalancing. According to HSBC, oil demand is expected to peak during the July-August summer period, aligning with the upcoming supply increase. “The market looks balanced in Q2 and Q3 on our estimates,” the bank noted in a research report.

Meanwhile, U.S. energy activity showed signs of contraction. The oil and gas rig count fell by four to 559 — the lowest since November 2021, according to Baker Hughes. The number of oil rigs dropped by nine to 442, while gas rigs increased by five to 114. As the market continues to react to economic indicators and geopolitical developments, analysts expect volatility to persist, but for now, crude is on firmer ground, buoyed by improving sentiment and cautious optimism over global growth.