Key events
Introduction: Oil prices set for steepest weekly drop since February
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
The oil price is on track for its biggest weekly losses in three months, bringing relief to consumers and central bankers alike.
Crude oil prices have fallen by over 6% so far this week, helped by easing tensions in the Middle East and uncertainty about demand for energy. That would be its worst week since the start of February.
After hefty losses early this week, Brent crude is trading around its weakest level since mid-March, at below $84 per barrel, having ended last week near $90 per barrel.
Hopes for a deal to bring about a ceasefire in Gaza, and free the remaining hostages held there since the October 7 attacks, have risen this week. US secretary of state, Antony Blinken, told Israel and Hamas that “the time is now” for a deal, during his seventh visit to the Middle East since last October.
A ceasefire, if agreed, would cut risks to oil supplies from the region.
The oil price also weakened after US stocks of crude oil climbed unexpectedly this week. The US Energy Information Administration (EIA) reported that energy firms added a surprise 7.3 million barrels of crude into stockpiles during the week to April 26.
The EIA also reported a surprise 0.3-million barrel build in gasoline inventories; analysts had expected gasoline stocks would decline by 1.1 million barrels.
David Morrison, senior market analyst at Trade Nation, says:
Added together, the data show that the US market has plenty of supply, and crude prices fell to reflect this.
Oil has also been hit by fading hopes for early cuts in US interest rates. Lower borrowing costs should boost oil demand, but that seems less likely given the stickiness of US inflation.
Also coming up today
Financial markets are bracing for the latest US Non-Farm Payroll – the monthly healthcheck on America’s jobs market, due at 1.30pm UK time.
Economists expect a slowdown in job creation; the NFP is expected to rise by 238,000, down on the 303,000 gain in March. The jobless rate is tipped to remain at 3.8%.
Attention will also focus on wage growth, which is expected to slow slightly to 4%, from 4.1% in March.
The agenda
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7.45am BST: French industrial production for March
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9am BST: Norges bank interest rate decision
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9.30am BST: UK services PMI report for April
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1.30pm BST: US non-farm payroll for April
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3pm BST: US services PMI report for April
