Oil edged higher in a session marked by choppy trading and reduced liquidity, as a mixed fundamental picture clashed with negative sentiment in broader markets.
The number of oil futures contracts traded fell to its lowest level since late January, partly due to the expiration of the August West Texas Intermediate contract. On the fundamental front, the outlook remains mixed as global supply has tightened as China tries to revive its flagging economic growth.
“Open interest has fallen sharply this week, reflecting lackluster trading action and reinforcing the view that systematic traders continue to be in control of price action,” said Rebecca Babin, senior energy trader at CIBC Private Wealth.
China’s efforts to revive growth, including lower interest rates, easier access to credit and a series of measures to boost its moribund housing market, have done little to bolster the economy of the biggest crude importer. Another sign that Beijing was looking to boost business confidence came this week in a joint pledge by the Communist Party and the government to improve conditions for private companies.
The recent recovery in the US dollar, after a fall last week, added to the drop in oil, with commodities traded in the currency more expensive for most buyers.
Prices:
- WTI for August delivery, which expires on Thursday, rose 28 cents to settle at $75.63 a barrel in New York.
- The most active September contract was set at $75.65
- Brent for September settlement gained 18 cents to settle at $79.64 a barrel.
