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LONDON: Oil prices fell on Friday, depressed by recession fears clouding the demand outlook, but remained on track for a weekly gain.

Brent crude futures were down $2.16, or 2.2%, at $97.44 a barrel by 1340 GMT while U.S. West Texas Intermediate (WTI) crude fell $2.48, or 2.6%, to $91.86.

Brent was on track for a 3% gain this week after last week’s 14% tumble on fears that rising inflation and interest rates will hit economic growth and demand for fuel.

The market was absorbing contrasting demand views from the Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA).

“We are seeing an economic slowdown, but its unclear if it’s as big a slowdown as some of the recent outlooks have been predicting,” said Ole Hansen, head of commodity strategy at Saxo Bank. “The demand will ebb and flow, but supply is still the main concern.”

European sanctions on Russian oil are due to tighten later this year while a six-month coordinated energy release agreed by the United States and other developed economies is due to run its course by the end of the year.

Oil demand rises as gas prices surge: IEA

On Thursday OPEC cut its forecast for growth in world oil demand in 2022 by 260,000 barrels per day (bpd). It now expects demand to rise by 3.1 million bpd this year.

The IEA, meanwhile, raised its demand growth forecast to 2.1 million bpd, citing gas-to-oil switching in power generation.

“There’s a great deal of uncertainty about demand in the short run. Until that settles, it (the market) will be like this for a while,” said Justin Smirk, a senior economist at Australian bank Westpac.

The IEA also raised its outlook for Russian oil supply by 500,000 bpd for the second half of 2022 but said OPEC would struggle to boost production.

“The oil market has bounced back this week, with Brent once more flirting with triple figures,” said Craig Erlam, senior market analyst at Oanda in London.

“All things considered, the price moves highlight just how tight the market remains and how sensitive it still is to spikes.”

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