Oil posted a fourth weekly gain amid lower summer trading volumes and tentative signs that global markets are tightening.
Russia has shown signs of reducing crude exports as it belatedly fulfills a pact with Saudi Arabia and the OPEC+ alliance to help balance global markets. China, the world’s largest crude importer, has also stepped up efforts to boost its economic recovery.
This week, oil continued to follow the whims of broader market sentiment due to reduced liquidity. Crude oil volumes are often reduced during the summer holiday period, and traders have been reducing their exposure, sharply curbing open interest in West Texas Intermediate. The US benchmark settled around $77 a barrel on Friday.
Crude oil has rallied since late June with signs that the market is adjusting, but is still down for the year. Recent Chinese economic data indicated that the recovery remains lackluster and continues to drag down oil demand.
The Federal Reserve’s aggressive monetary policy also continues to weigh on the demand outlook, with the market pricing in another interest rate hike this month. Odds of a further move higher rose slightly after initial jobless claims data released on Thursday pointed to continued strength in the labor market.
Prices:
- WTI for September delivery rose $1.42 to settle at $77.07 a barrel in New York.
- Brent for September settlement gained $1.43 to settle at $81.07 a barrel.
