Oil Steadies After Capping Best Weekly Gain Since Early April

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(Bloomberg) — Oil steadied after the biggest weekly gain since early April as investors juggled signs of tightening supply and persistent demand concerns.

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Brent futures traded above $78 a barrel after closing 4.8% higher last week following a pledge by Saudi Arabia and Russia to reduce supply. The market is flashing signs of strength and speculators have boosted their bullish bets for the global benchmark and West Texas Intermediate crude.

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However, Treasury Secretary Janet Yellen said the risk of a US recession is “not completely off the table,” adding an element of caution to the market. She made the remark in a CBS interview broadcast on Sunday.

Oil remains about 9% lower for the year due in part to China’s lackluster economic recovery and aggressive monetary tightening by central banks. A solid US employment report keeps the Federal Reserve on track to boost interest rates this month, maintaining headwinds for crude prices.

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In Asia, data Monday showed China’s consumer inflation rate eased to zero in June while factory-gate prices fell further, underlining continued weakness in demand. The International Energy Agency and OPEC will provide snapshots of the market when they release monthly reports later this week.

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The US announced on Friday that it’s purchasing 6 million more barrels of crude for the Strategic Petroleum Reserve as the nation continues to slowly refill the emergency stockpile. The purchases, scheduled for October and November, come as the reserve is at its lowest point in 40 years.