(Bloomberg) -- Oil advanced for a second session but remains on track for a large weekly loss as demand concerns continue to hang over the market.
West Texas Intermediate futures rose toward $75 a barrel on Friday, trimming the weekly decline to around 7%. Saudi Arabia reduced its prices for crude that will be shipped to Europe and Asia in February, highlighting concerns over the near-term outlook. Top crude importer China is battling a surge in virus cases after Covid-19 restrictions were lifted, weighing on demand.
“Broader financial markets started 2023 in a dark mood over the global economy and oil has become caught up in it,” said Vandana Hari, founder of Vanda Insights. Bargain hunting is helping to drive prices higher, she added.
The lackluster start to the year has been exacerbated by a lack of liquidity, leaving oil futures prone to wild price swings. The International Monetary Fund warned earlier in the week that a third of the global economy could enter a recession in 2023, while Federal Reserve Bank of St. Louis President James Bullard signaled that US interest rates weren’t yet sufficiently restrictive.
US crude and refined product exports rose by 1.33 million barrels last week, according to government data. Commercial crude stockpiles climbed by 1.69 million barrels, while gasoline inventories fell.