Oil Set for Weekly Gain as Global Supplies Tighten, Volumes Thin

Oil headed for a fourth weekly gain amid tentative signs that global markets are tightening.

(Bloomberg) — Oil headed for a fourth weekly gain amid tentative signs that global markets are tightening.

West Texas Intermediate rose above $76 a barrel in thin trading volumes. Russia has shown signs of paring crude exports as it belatedly honors a pact with Saudi Arabia and the OPEC+ alliance to help balance world markets. China, the world’s biggest crude importer, also has stepped up efforts to boost its flagging economic recovery.

Oil has continued to follow the whims of broader market sentiment due to dwindling liquidity. Crude volumes often taper off during the summer holiday period, and traders have been reducing their exposure, sharply curbing open interest in West Texas Intermediate.

Crude has ticked higher since late June on signs the market is tightening, but is still down for the year. Recent Chinese economic data signaled that the recovery remains lackluster and continues to drag on 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. The odds for a further move higher went up slightly after initial jobless claims data released Thursday pointed to continued labor-market strength.

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