2023.06.0219:02:00UTC+00Oil Futures Settle Sharply Higher On Strong Jobs Data, Passage Of Debt Ceiling Bill

Oil prices rallied on Friday, extending gains from the previous session, following the passage of the debt ceiling bill, and amid speculation the OPEC and allies might announce a cut in production.

Buoyant non-farm payroll data for the month of May contributed as well to the rise in oil prices. Data from the Labor Department showed non-farm employment soared by 339,000 jobs in May after spiking by an upwardly revised 294,000 jobs in April.

Economists had expected employment to climb by 190,000 jobs compared to the jump of 253,000 jobs originally reported for the previous month.

West Texas Intermediate Crude oil futures for July ended higher by $1.64 or about 2.3% at $71.74 a barrel.

Brent Crude futures were up $1.80 or 2.41% at $76.08 a barrel a little while ago.

WTI crude futures shed about 1.3% in the week.

Following the Senate passing a new debt ceiling agreement on Thursday, President Joe Biden is poised to sign the bill today. The Senate voted 63 to 36 in favor of the debt ceiling bill, with 17 Republicans joining with the majority of Democrats to approve the legislation.

Data from Baker Hughes showed the number of total active drilling rigs in the United States fell by 15 this week. Over the last four weeks, the rig count has dropped by 52, the largest 4-week dropoff in activity since June 2020.

The total rig count fell to 696 this week, which is 31 rigs below this time last year.

The number of oil rigs fell by 15 this week to 555. Gas rigs stayed the same at 137. Miscellaneous rigs stayed the same at 4.

The Organization of the Petroleum Exporting Countries and allies, collectively known as OPEC+, is scheduled to meet on Sunday.

Saudi Energy Minister Abdulaziz bin Salman warned oil short sellers last week, hinting at further reduction in production. However, Russian President Vladimir Putin has said oil prices are close to "economically justified" levels, indicating more output cuts might not be required.