Oil edged higher in a session marked by choppy trading and dwindling liquidity as a mixed fundamental picture dueled with negative sentiment from broader markets.
(Bloomberg) — Oil edged higher in a session marked by choppy trading and dwindling liquidity as a mixed fundamental picture dueled with negative sentiment from broader markets.
The number of oil futures contracts trading hands dropped to the lowest since late January, in part due to the expiration of West Texas Intermediate’s August contract. On the fundamental front, the outlook remains varied as global supply has tightened while China attempts to revitalize its sagging economic growth.
“Open interest has dropped precipitously this week, reflecting the low-conviction trading action and reinforcing the view that systematic traders continue to be in control of price action,” said Rebecca Babin, a 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 kick-start the moribund housing market — have done little to bolster the economy of the biggest crude importer. Another signal that Beijing was seeking to boost corporate confidence came this week in a joint pledge by the Communist Party and the government to improve conditions for private businesses.
The recent revival in the US dollar, following a slump last week, added to the bearishness for oil, with commodities priced in the currency more expensive for most buyers.
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