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Crude oil prices pared early gains and settled flat on Friday as fears of a global recession raised concerns about the outlook for energy demand.
Data showing a contraction in U.S. service sector activity in the month of December, concerns about rising Covid cases in China, and insistence on Covid tests by several countries for visitors from China weighed on oil prices.
Oil futures shed ground despite the dollar turning weak amid easing concerns about Fed policy tightening after data showed a drop in U.S. wage growth in the month of November.
Oil prices surged higher earlier in the session on optimism surrounding China’s reopening and expectations of further stimulus measures.
West Texas Intermediate Crude oil futures for February settled at $73.77 a barrel, up just 10 cents from the previous close. The contract rose to a high of $75.47 a barrel in late morning trades before paring gains.
Brent crude futures dropped $0.18 to $78.51 a barrel.
Both WTI Crude futures and Brent Crude futures shed more than 8% in the week.
Data from the Labor Department showed that non-farm payroll employment jumped by 223,000 jobs in December after surging by a revised 256,000 jobs in November.
Economists had expected employment to shoot up by 200,000 jobs compared to the addition of 263,000 jobs originally reported for the previous month.
The unemployment rate edged down to 3.5% in December from a revised 3.6 percent in November. The unemployment rate was expected to come in unchanged compared to the 3.7% originally reported for the previous month.
Annual wage growth slowed to 4.6% in December from 4.8% in November. Easing wage growth reduced worries over the Fed’s rate-hike trajectory.
Data from the Institute for Supply Management showed that U.S. service sector activity unexpectedly contracted in the month of December.
The ISM said its services PMI tumbled to 49.6 in December from 56.5 in November, with a reading below 50 indicating a contraction. Economists had expected the index to edge down to 55.0.
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