ANZ believes that falling oil prices are due to a cooling job market in the U.S. and the biggest drop in factory activity in nine months. These issues are causing worries about lower demand for crude oil. Reports say that OPEC+ plans to boost oil production by 547,000 barrels a day in September, which may also be influencing oil prices. The Wall Street Journal references ANZ Research analysts regarding this price dip.

Trump Denies Job Market Data

Former President Trump argues that the cooling job market data is manipulated. He has fired the official in charge of these statistics and intends to appoint a new leader for the Bureau of Labor Statistics soon. This raises questions about whether people will trust any updated job numbers resulting from this new appointment. Oil prices have dropped recently, but the decline does not seem to be continuing, hinting that the gap may close shortly. Today, oil prices are falling due to fears of weak demand in the United States. The job market is cooling sharply, and factory output growth is at its slowest in nine months, indicating a possible economic slowdown. The Non-Farm Payrolls report for July 2025 revealed only 85,000 new jobs, significantly lower than the expected 190,000. This economic weakness raises alarm for oil demand. The latest ISM Manufacturing PMI reading of 47.2, released last week, shows the factory sector has contracted for three months straight. For traders, this strengthens a negative outlook, indicating that selling crude oil futures rallies might be a wise strategy in the short term.

Oil Price Volatility Expected

On the supply side, OPEC+’s decision to raise output by 547,000 barrels daily in September adds more downward pressure. However, we think this increase was largely expected and already included in the current oil price. A similar production boost announced in late 2024 led to a quick price drop. The upcoming weeks hold uncertainty due to the political issues surrounding U.S. job data. The administration’s plan to appoint a new head for the Bureau of Labor Statistics creates doubts about the reliability of future economic reports. Markets may start reacting less to official numbers and more to how they perceive the situation. This backdrop suggests an increase in volatility. Although real economic data points toward lower oil prices, politically influenced “stronger” job reports might lead to sudden and unpredictable price increases. Looking back, we noticed increased market fluctuations after the contentious changes in Fed leadership in 2023. Given these mixed signals, traders may want to focus on strategies that benefit from price swings rather than guessing a specific direction. Buying options straddles on oil ETFs, which can profit from a big price movement either way, might be a way to take advantage of expected volatility. This strategy helps protect against the uncertainty of whether actual economic weakness or manipulated data will prevail. Create your live VT Markets account and start trading now.

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