Oil edged up toward $76 a barrel on Friday and was heading for a weekly gain of more than 4 percent, after a drop in U.S. inventories and positive economic indicators lifted sentiment across markets.

European shares drifted higher on Friday for a fourth straight session, supported by soothing U.S. jobless and retail sales numbers. Wall Street rose in early trade, while the euro slipped off two-month highs against the dollar.

U.S. crude for August was up 13 cents to $75.57 a barrel by 1342 GMT, after touching an intraday peak of $76 on Thursday, the highest price this month. ICE Brent gained 27 cents to $74.98.

Oil in New York is up more than 4 percent this week, after ending the previous week at a three-week low.

The main driver is still financial markets -- the stock market and the weaker U.S. dollar are the main reasons why oil prices have had a positive week this week, said Carsten Fritsch, analyst at Commerzbank.

Additional support came from U.S. inventory data showing a large decline in crude stocks.

Crude inventories in the United States dropped 5 million barrels last week, more than twice as much as expected, the Energy Information Administration said.

U.S. crude was still well below a 19-month peak above $87 reached in early May, having rebounded sharply from a trough below $65 on May 20.

Wall Street staged a late-day surge on Thursday, extending a rally to three days on data showing U.S. first-time jobless claims fell to their lowest in two months, and after a handful of large retailers reported solid sales.

The oil market awaits Chinese trade data, to be published on Saturday, for further price direction.

Year-on-year import and export growth probably slowed last month from the sizzling pace set in May, in large part reflecting a higher base of comparison as the global recovery gained strength around the middle of last year.

(Additional reporting by Alejandro Barbajosa; Editing by Sue Thomas and Alison Birrane)