Oil powers toward fifth weekly gain as market starts to tighten

Oil headed for its longest run of weekly gains in more than a year on an improving macroeconomic outlook and signs of a tighter market.

West Texas Intermediate edged below US$80 a barrel Friday but has still rallied more than three per cent this week for a fifth consecutive gain. In the U.S., economic growth exceeded expectations, and there's speculation the Federal Reserve is near or at the end of its tightening cycle. Chinese authorities, meanwhile, have pledged more stimulus to support growth in the largest crude importer.

Crude holdings at the key U.S. storage hub in Cushing, Oklahoma, have declined by 7.5 million barrels during the past four weeks, pushing stockpiles to their lowest since May. That's helping support a widening of WTI's backwardation for its nearest two contracts, a bullish pricing pattern that has grown to its largest since November.