Brent crude oil is traded higher this morning following a tough few sessions post-FOMC as advancing U.S. Treasury yields have given the dollar upside support. Despite the ballooning USD, Brent crude has held up relatively due to favorable inventory data, including API and EIA weekly stock releases.
Today’s focus is the Non-Farm Payroll (NFP) data print which is expected at 200K. Although the correlation between ADP employment change and initial jobless claims is hardly anything to go by, a print higher than 200K could see Brent crude trading lower by the end of the trading day.
To end Friday’s session, Baker Hughes rig count numbers which have been on the decline may provide some backing for crude oil prices should this trend continue.
Observing money market pricing on Fed interest rate probabilities in the table below, the terminal rate has risen to 5.175% in June after a peak of 5% in May just earlier this week.
This resultant effect should hold medium-term and limit crude oil gains. It will be interesting to see how OPEC+ reacts to these additional headwinds come to the December meeting and whether they may look at further output cuts.