Falling oil prices caused by subpar American employment statistics and Trump's imposed tariffs
The global economy and oil prices are currently influenced by a complex interplay of three key factors: the US jobs report, OPEC+ production decisions, and US tariffs.
Nigel Green, chief executive of deVere Group, has raised a "major red flag" following the release of a weaker-than-expected US jobs report. In July 2025, the US added only 73,000 jobs, below forecasts, pushing up unemployment and fueling worries over weaker oil demand. This downward pressure on oil prices is a cause for concern, as it signals potential slower economic growth.
On the other hand, decisions made by the OPEC+ alliance regarding production can significantly impact the supply side. For instance, discussions about increasing output by around 548,000 barrels per day in September 2025 have led to oil price declines, as markets anticipate higher supply. Even hints of smaller production hikes have caused prices to fall, as seen in recent drops of about $2 per barrel or roughly 3% declines.
US tariffs also play a role in this intricate dance. They can affect oil prices and the broader economy by influencing trade costs and economic growth. Although specific recent tariff details are less highlighted, analysts note that tariffs and Federal Reserve interest rate decisions add uncertainty to economic and oil market outlooks. Tariffs may constrain demand growth by raising costs or lowering economic activity, which can dampen oil demand.
The combination of these factors is causing oil prices to be volatile. Weaker US jobs data signals softer demand, OPEC+ output increases suggest more supply, and tariffs add trade-related uncertainties. This combination tends to push oil prices down in the short term, potentially slowing the global economy by signaling weaker growth prospects and trade frictions.
In the midst of this volatile market, oil prices could remain under pressure over the medium to long term due to concerns about weaker global demand. Analysts such as Joseph Dahrieh predict that if the economic slowdown materialises, the market could see new declines in prices.
Meanwhile, the market is "vastly oversupplied", thereby tilting the balance of risks firmly to the downside, and leaving any spikes vulnerable to being sold into relatively quickly, according to Michael Brown.
The next Fed meeting is scheduled for mid-September, and the outcome of this meeting could further impact the oil market. Oil traders are also focused on US-China trade talks and Mr Trump's threat to hit buyers of Russian oil with secondary tariffs.
In the midst of these uncertainties, oil prices on Friday were pressured by expectations that the OPEC+ alliance will decide to boost supplies to the market this weekend. West Texas Intermediate crude oil fell 2.79% to $67.33 a barrel on Friday, and Brent crude oil dropped 2.83% to $69.67 a barrel.
[1] [Source 1] [2] [Source 2] [3] [Source 3] [4] [Source 4] [5] [Source 5]
- The weaker-than-expected US jobs report raised a major red flag by Nigel Green, highlighting potential slower economic growth and lower oil demand.
- In July 2025, the US added only 73,000 jobs, below forecasts, pushing up unemployment and concern over oil prices.
- Decisions made by the OPEC+ alliance regarding production can significantly impact the supply side, as seen in the oil price declines following discussions about increasing output.
- US tariffs also contribute to the intricate dance, influencing oil prices and the broader economy by affecting trade costs and economic growth, thus adding uncertainty.
- Weaker US jobs data, OPEC+ output increases, and tariffs create a volatile market, pushing oil prices down and signaling weaker growth prospects.
- Analysts predict that if the economic slowdown materializes, the market could see new declines in oil prices, causing the market to remain under pressure over the medium to long term.
- The market is vastly oversupplied, with the balance of risks firmly tilting to the downside, making any spikes vulnerable to being sold into relatively quickly.
- The next Fed meeting scheduled for mid-September could further impact the oil market, while US-China trade talks and Mr. Trump's threat to hit buyers of Russian oil with secondary tariffs are also a focus for oil traders.
- According to [Source 1], OPEC+ alliance decisions to boost supplies to the market could further push oil prices down, as seen on Friday when West Texas Intermediate crude oil fell 2.79%.
- [Source 2] notes that the Middle East, particularly the political climate in Syria and Iraq, as well as energy industry developments in Jordan, Emirates, and Iran, also play a role in the global oil market, adding another layer of complexity to the intricate dance between these key factors.
