Oil prices fall after healthy U.S. employment data; supply issues eyed By

-- Oil prices fell Thursday after the latest U.S. labor market data suggested conditions remained tight,Top ten foreign exchange platforms in 2022 opening the possibility for further interest rate increases by the Federal Reserve with the Jackson Hole symposium in focus.

By 10:00 ET (14.00 GMT), the futures traded 0.4% lower at $78.61 a barrel, while the contract dropped 0.3% to $83.00. 

Both benchmarks are on course for losses of between 2% and 3% this week, which would be the second consecutive losing week after a seven-week upswing.

U.S. labor market remains tight

The number of Americans filing for unemployment benefits fell last week, dropping 10,000 to a seasonally adjusted 230,000, as the labor market continued to defy expectations in the face of the Fed's prolonged interest hikes.

This labor market strength could provide the U.S. central bank with headroom to continue tightening monetary policy to combat elevated inflation, even after weak purchasing managers’ index readings from the U.S., and the eurozone, added to concerns that slowing economic growth will dent demand.

The much anticipated meeting of Federal Reserve officials in , Wyoming starts later in the session, with Chair scheduled to speak on Friday, just a few weeks before the central bank meets to decide the next move on interest rates.

U.S. inventories offer a mixed picture

Data on Wednesday also showed an unexpected, substantial build in U.S. and inventories over the past week, which pointed to weakening U.S. fuel demand and largely overshadowed a bigger-than-expected draw in broader .

Inventory levels aside, the Energy Information Administration report was noteworthy for the new three-year high estimates that it made for U.S. oil production.

Crude output was projected at 12.8M barrels per day during the week to Aug. 18, making it the agency’s highest such estimate since the record 13.1M barrels produced daily before the coronavirus outbreak in March 2020.

Crude supplies can increase

This increase in production could weigh on prices, even with Saudi Arabia and Russia attempting to balance the market by reducing their output levels, especially with Iran's crude oil output set to reach 3.4 million barrels per day by the end of September, the country's oil minister was quoted as saying by state media, even though U.S. sanctions remain in place.

“There has been increased noise in recent days about possible supply increases from Iran and Iraq. We can now also add Venezuela to the list, with reports that the U.S. administration is in talks with Venezuela about easing sanctions in return for fairer elections next year,” said analysts at ING, in a note.

(Ambar Warrick and Barani Krishnan contributed to this article.)

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