Oil rises due to tight supplies, but it is on its way to a weekly decline

Oil prices rose on Friday, supported by tight supplies and new sanctions on Iran, but prices are on track for a weekly decline after major central banks raised interest rates, which raised fears of a sharp economic slowdown.

Brent crude rose 62 cents, or 0.5 percent, to $ 120.43 a barrel by 0856 GMT, and US West Texas Intermediate crude rose 75 cents, or 0.6 percent, to $ 118.34.

Both were down more than $1 earlier in the session.

Brent crude is heading to record its first weekly decline in five weeks, while US crude is heading for its first decline in eight weeks after they tracked the impact of a decline in stock markets amid fears of a possible recession in the wake of central banks’ decisions to raise interest rates sharply.

However, oil prices received some support from US sanctions on Chinese and Emirati companies and a network of Iranian companies that helped export Iranian petrochemical products.

The US government said that while it continues diplomatic efforts to revive the nuclear deal with Iran, it will continue to use sanctions to limit exports of Iranian oil and petrochemical products.

Analysts estimate that the agreement and the consequent lifting of sanctions imposed on Iran’s energy sector could add up to 1 million barrels of oil per day to global markets.