Oil prices fall despite reports that OPEC agrees on production cut

Oil prices fell on Friday in Asia despite reports that OPEC ministers decided to cut oil output by 1.5 million barrels per day. The cut is reportedly to be conditional on approval from Russia.

The 14-member group added that the group would review this policy at its next meeting on June 9.

A meeting of both OPEC and OPEC+ members later in the day is in focus. Russia’s willingness for deeper production cuts are uncertain, as recent reports suggested that Moscow is in favor of an extension to the current level of cuts rather than a further reduction.

The news failed to lift oil prices today however, as slumping US equities put pressure on oil markets.

US Crude Oil WTI Futures were down 1.3% to $45.31 by 12:30 AM ET (04:30 GMT). International Brent Oil Futures also lost 1.3% to $49.33.

Traders will be paying attention on the upcoming nonfarm payroll report.

Economists are forecasting the figure to rise by 175,000 last month, according to forecasts compiled by Investing.com.

The unemployment rate is seen holding steady at 3.6% and average hourly earnings are expected to have rise 0.3%, or up 3% on an annual basis.

“The coronavirus economic impact could finally be hitting the US labor market,” said Ed Moya of online trading platform OANDA. “If the strongest part of the U.S. economy starts to weaken, recession concerns will grow quickly.”

“Also, this is a critical moment for OPEC+ as a holdout by the Russians could drive oil prices to their financial crisis lows.”

Despite some recovery this week, WTI remained down 24% on the year and Brent down 23%.