WTI crude oil climbs above $80.00 as NFP and recession fears contend with an OPEC+ surprise

As energy markets celebrate the Good Friday holiday, WTI crude oil prices remain stable around $80.50, poised for a three-week uptrend. In doing so, black gold defends the week-beginning gains provided by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, headed by Russia, known as OPEC+, who announced a surprise output cut. However, concerns of a recession and a cautious disposition ahead of the March US employment report have recently posed a challenge to the energy benchmark.

The OPEC+ group startled the market with a voluntary output decline of nearly 1.66 million barrels per day. The International Energy Agency (IEA) stated, in response to the OPEC+ announcements, that the OPEC+ decision to reduce oil output risks aggravating a stressed market by driving up oil prices in response to inflationary pressures.

On the other hand, the US Dollar's weakness, bolstered by disappointing US data, supported the recovery of the black gold.

In spite of this, the US Dollar Index (DXY) has a four-day losing streak and is currently trading around 102.000.

Initial Jobless Claims for the week ending March 31 increased to 228K from 200K expected and an upwardly revised 246K the previous week. Notable is that the Challenger Job Cuts for the given month increased from 77,77K to 89,703K. Previously, US JOLTS Job Openings fell to a 19-month low in February, and March's ADP Employment Change figures of 145K also disappointed markets. In addition, the US ISM Services PMI for March decreased to 51.2 compared to 54.5 anticipated and 55.1 previously.

China's optimism for economic development and optimistic activity data from the dragon nation could also support the oil price. Pan Gongsheng, the director of China's State Administration of Foreign Exchange (SAFE), stated on Friday that Beijing "will defend itself against external financial market shocks and risks."

It should be noted, however, that recent calls for a recession pose a challenge to WTI crude oil purchasers, and more signs of economic decline should be monitored for direction, particularly when commodity prices trade near the key short-term resistance line.

In addition to the news about the recession, the March US employment report will be crucial to monitor for direction. Analysts anticipate a decline in headline Nonfarm Payrolls (NFP) to 240K from 311K previously, with the unemployment rate remaining unchanged at 3.6%. However, the contradictory forecasts for Average Hourly Wages make the outcome even more intriguing.