Oil prices settled up by more than $3 a barrel on Friday (local time), supported by tight supply, but they notched their second weekly decline on concern that rising interest rates could push the world economy into recession.
Brent crude settled up $3.07, or 2.8 percent, at $113.12 a barrel by 12:10 p.m. EDT (1610 GMT). US West Texas Intermediate (WTI) crude settled up $3.35, or 3.2 percent, at $107.62.
The US Federal Reserve "was talking very hawkish which was undermining the oil rally, but sentiment is changing a little especially on strong economic data," said John Kilduff, partner at Again Capital LLC in New York.
On Thursday, Fed Chair Jerome Powell said the central bank's focus on curbing inflation was "unconditional", adding to fears about more interest rate hikes.
A survey on Friday showed US consumer sentiment hit a record low in June even as the outlook for inflation improved slightly.
Russia's invasion of Ukraine exacerbated tight supplies this year just as demand has been recovering from the COVID pandemic, and oil came close to an all-time high of $147 reached in 2008.
Crude has gained support from the almost total shutdown of output in OPEC member Libya due to unrest. On Thursday, the Libyan oil minister said the National Oil Corporation chairman was withholding production data from him, raising doubts over figures issued last week.
Stephen Brennock of oil broker PVM said recession fears dominated sentiment, yet "the consensus remains that the oil market will see high demand and tight supply over the summer months, thereby limiting the downside."
The Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, meet on June 30 and are expected to stick to a plan to only slightly accelerate hikes in oil production in July and August.
US energy firms this week added oil and natural gas rigs for a second week in a row in a record 23-month streak of increases, as high crude prices and prodding by the government prompted drillers to return to the wellpad, energy services firm Baker Hughes Co said in its closely followed report on Friday.
The latest weekly US oil inventory figures, which will give a snapshot of supply tightness in the top consumer, have been delayed to next week due to technical issues.
Reuters
