Oil Markets Hold Steady Amidst Robust U.S. Job Growth and Looming Tariff Decisions

Global oil prices saw minimal movement on Friday as a robust U.S. labor market bolstered arguments for the Federal Reserve to maintain current interest rates. Meanwhile, investors keenly awaited clarity on President Donald Trump's impending tariff announcements, injecting a dose of uncertainty into the global trade landscape.

As the U.S. observed its Independence Day holiday, trading volumes remained thin. Brent crude futures edged up by a mere 1 cent, or 0.01%, to reach $68.81 a barrel by 0036 GMT. Simultaneously, U.S. West Texas Intermediate (WTI) crude firmed slightly by 3 cents, or 0.04%, settling at $67.03.

U.S. Job Market Defies Expectations, Bolstering Fed's Stance

New data released on Thursday indicated that the U.S. labor market continues to show resilience. American firms added a stronger-than-expected 147,000 jobs in June, and the unemployment rate unexpectedly declined to 4.1%. These figures signal an economy that remains robust despite ongoing turbulence and the specter of significant tariffs. This solid performance in the job market largely reduces pressure on the Federal Reserve to consider interest rate cuts, reinforcing the likelihood of rates holding steady.

Trump's Tariff Game Enters New Phase

President Trump confirmed a significant shift in his trade strategy, announcing that Washington would begin sending letters to various countries on Friday, specifying the tariff rates they will face on goods imported into the United States. This marks a departure from earlier pledges of striking numerous individual deals. Trump, speaking to reporters before his departure for Iowa on Thursday, revealed that these letters would be dispatched to 10 countries at a time, outlining tariff rates ranging from 20% to 30%.

The 90-day pause on higher U.S. tariffs is set to expire on July 9, leaving major trading partners, including the European Union and Japan, in a precarious position as they have yet to finalize new trade agreements.

OPEC+ Boosts Production, Sanctions Target Iranian Oil

Counterbalancing potential upward pressure on prices, OPEC+, the alliance of the world's largest oil producers, is reportedly poised to increase its August production by 411,000 barrels per day. This move, as indicated by four delegates within the group to Reuters, is aimed at regaining market share.

In a separate development, the U.S. Treasury Department announced new sanctions on Thursday targeting a network involved in smuggling Iranian oil, often disguised as Iraqi oil, and a financial institution reportedly controlled by Hezbollah. This action underscores continued efforts to tighten the economic noose on Iran's illicit oil trade.

Adding to the evolving outlook, Barclays, the global banking giant, revealed on Thursday that it has raised its Brent crude oil price forecast. The bank now anticipates Brent to reach $72 per barrel for 2025 (up by $6) and $70 a barrel for 2026 (an increase of $10), citing an improved demand outlook.