Oil falls ahead of US jobs data

NEW YORK: Oil prices fell on Thursday as caution over macroeconomic activity weighed against output cuts and geopolitical tensions.

Brent futures for June fell by 43 cents, or 0.5 percent, to $88.92 a barrel by 1615 GMT. US West Texas Intermediate (WTI) futures for May fell by 57 cents, or 0.7 percent to $84.86 a barrel.

Investors continue to look to macroeconomic data and monetary policy for potential clues on the outlook for oil demand.US unemployment claims increased by more than expected in the last week, according to Labor Department statistics, as labor market conditions gradually ease.

That came after Federal Reserve Chair Jerome Powell expressed caution on Wednesday about the timing of future interest rate cuts, after recent data has showed higher-than-expected job growth and inflation.March’s employment report on Friday is likely to show nonfarm payrolls increased by 200,000 jobs in March after rising by 275,000 in February, according to a Reuters survey.

“One thing that could thwart an oil rally is if the Federal Reserve takes rate cuts off the table,” said Phil Flynn, analyst at Price Futures Group.The threat of sanctions has also capped some gains.

The United States on Thursday imposed new Iran-related counter-terrorism sanctions against Oceanlink Maritime DMCC and its vessels, citing its role in shipping commodities on behalf of the Iranian military.

The United States is using financial sanctions to isolate Iran to disrupt its ability to fund its proxy groups and hamper the country’s support for Russia’s war in Ukraine, the Treasury Department said.

Washington has also signalled it could reimpose oil sanctions ahead of Venezuelan presidential elections later this year that many countries have said might not feature competitive voting.Oil’s recent gains have also followed Ukrainian attacks on Russian refineries that cut fuel supply, and concerns the Israel-Hamas war in Gaza may spread to include Iran and possibly disrupt supplies in the Middle East region.