Oil heads for second weekly drop on recession fears | Reuters

Oil heads for second weekly drop on recession fears | Reuters

Oil prices slipped on Friday and were heading for a second weekly fall, as tight supply was overshadowed by concern that rising interest rates could push the world economy into recession.

U.S. Federal Reserve Chair Jerome Powell said on Thursday the central bank's focus on curbing inflation was "unconditional," adding to fears about more interest rate hikes. read more

Stephen Brennock of oil broker PVM said recession fears dominated sentiment, adding: "That being said, the consensus remains that the oil market will see high demand and tight supply over the summer months, thereby limiting the downside."

Brent crude fell 8 cents, or 0.1%, at $109.97 a barrel by 0815 GMT, while U.S. West Texas Intermediate (WTI) crude was also down 8 cents at $104.19. Both benchmarks were heading for their second weekly decline.

"Increasing recession fears appear to be prompting a culling of heavy speculative long positioning in both contracts, even as in the real world, energy tightness is as real as ever," said Jeffrey Halley, analyst at brokerage OANDA.