• While West Texas Intermediate climbed to trade near $74 a barrel on Friday, steep losses at the start of the week have put futures on track for a large weekly decline. Saudi Arabia reduced its prices for crude that will be shipped to Europe and Asia in February. China is battling a surge in virus cases after Covid-19 restrictions were lifted, weighing on near-term demand.
  • The lackluster start to the year has been exacerbated by a persistent lack of liquidity, leaving oil futures prone to wild price swings. Federal Reserve Bank of St. Louis President James Bullard signaled that US interest rates weren’t yet sufficiently restrictive, adding to the bearish sentiment. The International Monetary Fund warned earlier in the week that a third of the global economy could enter a recession in 2023.