DTN Oil

WASHINGTON (DTN) -- Nearest-delivery oil futures on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange settled the Friday session lower. Declines were led by the front-month ULSD contract amid pressure from the sharp slowdown in new U.S. hires last month. Meanwhile, stimulus talks on Capitol Hill to extend supplemental unemployment benefits for over 30 million Americans seemed to have made little progress this week.

Negotiations between U.S. lawmakers over a new round of coronavirus relief ground to a halt on Friday, with President Donald Trump threatening to pull White House representatives out of talks and instead issue executive orders to address economic needs. Senate Minority Leader Chuck Schumer, D-New York, said Friday that the meeting was "disappointing" and both sides remain trillions of dollars apart in their respective plans.

Meanwhile, growth in U.S. non-farm payrolls slowed sharply in July compared with the previous two months as resurgence in coronavirus cases swept through Southwestern states, forcing many businesses to reduce operational capacity or shutdown altogether. Last month, hard-hit states like Florida, Texas and California put their reopening plans on indefinite hold, undermining re-hiring and business confidence. Government data showed the U.S. economy added a mere 1.783 million new jobs last month following 4.8 million job gains in June and 2.699 million in May. Further details of the report show employment in leisure and hospitality slowed sharply in July at just 592,000 from 2 million the prior month, while employment in food services added 502,000 after gains of 2.9 million in May and June combined.

High-frequency jobless claims, however, suggest the labor market might be rebounding after applications for first-time unemployment benefits for the week ended Aug. 1 dropped to their lowest in five months. Unemployment claims declined across nearly all states as coronavirus infections tailed off sharply last week, possibly luring businesses back to reopen.

Separately, the number of oil rigs actively drilling in the U.S. fell four in the week ended Friday to 176, the lowest level since the week ended July 15, 2005, when 168 rigs were counted, according to the Baker Hughes data. The U.S. oil rig count is down 588 from year ago, with 479 of those rigs pulled from service in the second quarter.

On the session, September West Texas Intermediate dropped 73 cents to $41.22 per barrel (bbl) and international Brent crude fell 69 cents to finish at $44.40 per bbl. NYMEX ULSD September futures shed 3.0 cents to $1.2199 gallon, and front-month RBOB futures fell 2.05 cents to $1.2076 gallon.

Liubov Georges can be reached at liubov.georges@dtn.com

(c) Copyright 2020 DTN, LLC. All rights reserved.