Oil futures surged in Asian trading on Monday as a potential hurricane approached the U.S. Gulf Coast, while markets rebounded from a selloff triggered by weaker-than-expected U.S. jobs data on Friday.

West Texas Intermediate (WTI) crude futures climbed 72 cents, or 1.06%, to $68.39 per barrel by 0635 GMT, while Brent crude futures increased 71 cents, or 1%, to $71.77 per barrel.

Prices had initially risen by as much as $1 during early Asian trading before retreating slightly.

Analysts attributed the price bounce partly to concerns over a potential hurricane in the U.S. Gulf Coast. The U.S. National Hurricane Center reported on Sunday that a weather system in the southwestern Gulf of Mexico is projected to develop into a hurricane before reaching the northwestern U.S. Gulf Coast, an area that accounts for about 60% of U.S. refining capacity.

“Sentiment has somewhat recovered from last week’s selloff,” noted independent market analyst Tina Teng.

On Friday, Brent crude had dropped 10% for the week, hitting its lowest level since December 2021, while WTI fell 8%, marking its lowest close since June 2023, driven by weak U.S. jobs data.

The highly anticipated U.S. government report revealed nonfarm payrolls increased by 142,000 in August, less than market expectations. Additionally, the July figure was revised downward to a gain of 89,000, marking the smallest increase since a decline in December 2020.

A dip in the jobless rate suggests the Federal Reserve may opt for a modest 25-basis-point interest rate cut this month rather than the 50-basis-point reduction that some had anticipated. Lower interest rates typically boost oil demand by stimulating economic growth and making oil more affordable for holders of non-dollar currencies.

However, concerns about weak demand continued to limit price gains. Jeff Currie, chief strategy officer of energy pathways at Carlyle Group, highlighted the economic slowdown in China and inventory destocking as key drivers of weak demand, speaking at the APPEC energy conference in Singapore on Monday.

In Asia, refining margins have fallen to their lowest seasonal levels since 2020 due to soft demand from the world’s two largest economies. Additionally, fuel oil exports to the U.S. Gulf Coast in August dropped to their lowest level since January 2019, reflecting weaker refining margins.

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