Investing.com– Oil prices edged higher Thursday, helped by an unexpected draw in U.S. inventories, but remained on course for hefty weekly losses as weak U.S. labor data added to ongoing global demand concerns. 

At 08:15 ET (12:15 GMT), rose 0.4% to $76.33 a barrel, while gained 0.2% to $72.09 a barrel.

So far this week, has fallen over 4%, while WTI crude is down 6%.

US inventories shrink more than expected 

Official data, released on Wednesday, showed oil shrank by 4.6 million barrels in the week to August 16, much more than the expected 2 million barrels expected.

Additionally, outsized draws in both and stockpiles suggested that fuel demand remained robust in the largest economy in the world even as the travel-heavy summer season wound down.

Weak US labor data triggers deeper losses in oil

However, gains are mild Thursday, and follow four straight losing sessions, after data released Wednesday by the U.S. labor department showed the U.S. economy added much fewer jobs than initially estimated.

The Bureau of Labor Statistics revised down March 2024’s employment gains by 818,000 positions, as part of an annual review of payrolls data. 

The reading sparked renewed concerns over a U.S. recession, especially after weaker-than-expected labor data for July triggered a broad risk-off sentiment across global financial markets.

While the softer labor market reading did cement expectations for an interest rate cut in September, it also added to concerns that the Federal Reserve may be too late in cutting rates, and that the U.S. economy was headed for a hard landing.

Such a scenario bodes poorly for demand in the world’s biggest fuel consumer, especially as recent data showed oil production in the country hit a record high of over 13 million barrels per day.

Traders remain uncertain over the outlook for demand later this year, especially after weak economic readings from China fueled concerns over slowing demand in the face of a slowdown in the world’s biggest oil importer.

(Ambar Warrick contributed to this article.)