news/BKR/2023.02.02/Oil falls about 3% as strong U.S. jobs data prompt interest rate concerns.txt

*Brent and WTI post weekly declines of nearly 8%*U.S. reports blowout job growth*EU agrees on price caps on Russian refined oil products*Russia says EU oil products ban will unbalance marketsNEW YORK, Feb 3 (Reuters) - Oil prices fell to over
three-week lows on Friday in a volatile session, after strong
U.S. jobs data raised concerns about higher interest rates and
as investors sought more clarity on the imminent EU embargo on
Russian refined products.Brent crude futures fell $2.23, or 2.7%, to $79.94 a
barrel, after rising to a session high of $84.20. It hit a
session low of $79.72, its lowest since Jan. 11.U.S. West Texas Intermediate crude (WTI) ended down
$2.49, or 3.3%, at $73.39, after trading between $78.00 and
$73.13, its lowest since Jan. 5.Brent registered a 7.8% decline this week while WTI dropped
7.9%.U.S. job growth accelerated sharply in January amid a
persistently resilient labour market, but a further moderation
in wage gains should give the Federal Reserve some comfort in
its fight against inflation."The market can't decide whether it should be nervous about
a recession or more worried about the Federal Reserve being
aggressive with interest rates," said Phil Flynn, analyst at
Price Futures Group.The U.S. central bank on Wednesday scaled back to a milder
rate increase than those over the past year, but policymakers
also projected that "ongoing increases" in borrowing costs would
be needed.Increases in interest rates in 2023 are likely to weigh on
the U.S. and European economies, boosting fears of an economic
slowdown that is highly likely to dent global crude oil demand,
said Priyanka Sachdeva, market analyst at Phillip Nova.European Union countries agreed to set price caps on Russian
refined oil products to limit Moscow's funds for its invasion of
Ukraine, the Swedish presidency of the EU said on Friday.EU diplomats said the price caps are $100 per barrel on
products that trade at a premium to crude, principally diesel,
and $45 per barrel for products that trade at a discount, such
as fuel oil and naphtha.The Kremlin said the EU embargo on Russia's refined oil
products would lead to further imbalance in global energy
markets.Meanwhile, ANZ analysts noted a sharp jump in traffic in
China's 15 largest cities after the Lunar New Year holiday but
said that Chinese traders had been "relatively absent."In U.S. supply, energy firms this week cut the number of oil
and natural gas rigs by the most since June 2020, energy
services firm Baker Hughes Co said. U.S. oil rigs fell
10 to 599 this week, their lowest since September, while gas
rigs dropped by two to 158.The U.S. Commodity Futures Trading Commission said on
Thursday that as a result of the ransomware attack on ION
Trading UK, the CFTC's weekly Commitments of Traders report will
be delayed until all trades can be reported. CFTC reports
provide a snapshot of investor positioning on various assets,
including oil.
(Reporting by Stephanie Kelly in New York; Ahmad Ghaddar and
Swati Verma in London, Sonali Paul in Melbourne and Jeslyn Lerh
in Singapore
Editing by Marguerita Choy and Susan Fenton)