Oil prices rose by more than a dollar a barrel on Friday to record their second-straight week of gains, as supplies tightened in some parts of the world and US inflation data indicated price rises were slowing.

Oil prices fell on Thursday as the dollar strengthened, with investors keeping close tabs on developments related to the reduction of Iraqi Kurdistan oil exports.

Crude prices retreated on Tuesday after rallying the previous session, with markets focused on developments in the banking crisis and indications of strengthening demand in China.

Oil prices dropped more than $2 a barrel on Tuesday, extending the previous day's slide, as the collapse of Silicon Valley Bank rattled equities markets and sparked fear about a fresh financial crisis.

Oil edged higher in volatile trade on Friday, and was flat on the week, with prices supported by the prospect of lower Russian exports but pressured by rising inventories in the United States and concerns over global economic activity.

Energy prices dropped 6.2 per cent in December, led by crude oil, according to a World Bank report.

Oil edged lower on Wednesday after slumping in the previous session, weighed down by concerns about weak demand due to the state of the global economy.

Oil prices dipped in Asian trade on Thursday as the dollar firmed, while the possibility of further interest rate hikes from global central banks also heightened demand concerns.

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Oil trickled down on Thursday, hovering around two-month lows, as the proposed price cap on Russian oil from Group of Seven (G7) nations was considered higher than the current trading levels, alleviating concerns over tight supply.

Oil prices were steady on Wednesday as concerns about lower fuel demand from China amid tightening COVID-19 curbs offset data showing a larger-than-expected U.S. crude draw last week.

Oil dropped by about 2 per cent on Friday, logging a second weekly decline, due to concern about weakened demand in China and further increases to US interest rates.

Oil prices fell on Tuesday as recession concerns and worsening Covid-19 outbreaks in China sparked fears of lower fuel demand, outweighing supply worries.

Oil prices settled up by more than 5 per cent on Friday amid uncertainty around future interest rate hikes by the US Federal Reserve, while a looming EU ban on Russian oil and the possibility of China easing some COVID restrictions supported markets.

Oil prices fell by more than $1 on Monday after weaker than expected factory activity data out of China and on concerns that the country's widening Covid-19 curbs will curtail demand.

Oil prices settled up on Friday as hopes of stronger Chinese demand and a weakening US dollar outweighed concern about a global economic downturn and the impact of interest rate rises on fuel use.

Oil prices plummeted more than 3 per cent on Friday as global recession fears and weak oil demand, especially in China, outweighed support from a large cut to the OPEC+ supply target.

OPEC on Wednesday cut its 2022 forecast for growth in world oil demand for a fourth time since April and also trimmed next year's figure, citing slowing economies, the resurgence of China's COVID-19 containment measures and high inflation.

Oil prices slid on Tuesday, extending losses of nearly 2 per cent in the previous session, as a stronger US dollar and a flare-up in COVID-19 cases in China raised concerns of slowing global demand.

The OPEC+ organisation's decision this week to cut oil production despite stiff US opposition has further strained already tense relations between President Joe Biden's White House and Saudi Arabia's royal family, once one of Washington's staunchest Middle East allies, according to interviews with about a dozen government officials and experts in Washington and the Gulf.