Crude oil prices plunged amid weak US economic data

On Thursday, crude oil prices declined as weak economic data from the United States raised global recession concerns. Still, the commodity heads for a weekly gain following the announcement of output cuts from OPEC+.

At the time of writing, the West Texas Intermediate futures plummeted by 0.33% to $80.34 per barrel. Likewise, the crude oil global benchmark Brent contracts decreased by 0.28% to $84.75 a barrel.

The US S&P global composite purchasing managers’ index in March came at 52.30 points. It is lower than the market estimate of 53.30.

Likewise, the nation’s services PMI was 52.60, below the 53.80 projections. It slowed more than expected last month as demand cooled. Meanwhile, a price gauge paid by services businesses fell to the lowest in around three years. This boosted the central bank to fight against inflation.

Furthermore, the US ADP nonfarm employment change shrank to 145,000 in March. It disappointed the analysts’ forecast of 200,000 and missed the former 261,000 records. This latest reading dropped to its lowest in nearly two years, suggesting a cooling labor market.

Besides, the greenback rebounded on Thursday from its two-month low. This move pushed crude oil prices further into bearish territory.

OPEC+ Output Cut

The leading crude oil benchmarks, Brent and WTI, have gained approximately 6.00% this week. Both are heading towards three consecutive weeks of increase after OPEC+ pledged to cut production.

Around 1.16 million barrels of oil per day are about to be cut in a move that would cause a future price spike. This pledge brings the total volume plunge to 3.66 million bpd, equal to 3.70% of global demand.

Adding to crude oil’s recent bullish stride is the EIA crude inventory of -3.79 million in the week ended March 31. This data surpassed market forecasts of -2.33 million barrels.